8-KAcquisitions & DispositionsRegulation FDExhibits & Filings

Trane Technologies plc 8-K Report, Acquisition Completed (Mar 5, 2020)

Filed March 5, 2020For Securities:TT

Summary

Trane Technologies plc (formerly Ingersoll-Rand plc) announced the completion of significant strategic transactions on February 29, 2020. The company completed the separation of its Industrial segment businesses through a spin-off and a Reverse Morris Trust merger with Gardner Denver, which has since been renamed Ingersoll Rand Inc. Following these transactions, Ingersoll-Rand plc officially changed its name to Trane Technologies plc. As a result, Trane Technologies shareholders now own 50.1% of the combined entity (Ingersoll Rand Inc.), with existing Gardner Denver shareholders owning 49.9%. This 8-K filing primarily serves to provide updated unaudited pro forma consolidated financial statements reflecting the impact of these transactions. The company will no longer consolidate the Industrial segment's results, and these historical results will be treated as discontinued operations from Q1 2020 onwards. Additionally, the company provided initial estimates for 2020, including an estimated $20 million in pension-related expenses and an adjusted effective tax rate between 19% and 20%.

Key Highlights

  • 1Completion of Reverse Morris Trust transaction combining Ingersoll-Rand's Industrial segment with Gardner Denver, creating a new standalone industrial company (Ingersoll Rand Inc.).
  • 2Ingersoll-Rand plc has been renamed Trane Technologies plc, focusing on its Climate and Industrial businesses.
  • 3Trane Technologies shareholders now hold a 50.1% stake in the newly formed Ingersoll Rand Inc.
  • 4The company will present historical financial results of the spun-off Industrial segment as discontinued operations starting in Q1 2020.
  • 5Unaudited pro forma financial statements are provided to reflect the financial impact of these transactions.
  • 6Initial 2020 estimates include approximately $20 million in pension-related expenses.
  • 7Projected 2020 adjusted effective tax rate is estimated to be between 19% and 20%.

Frequently Asked Questions

The main event is the completion of a strategic transaction where Ingersoll-Rand plc spun off its Industrial segment businesses and merged them with Gardner Denver. Following this, Ingersoll-Rand plc was renamed Trane Technologies plc.

It's a tax-efficient transaction structure where a company spins off a business unit (Ingersoll-Rand Industrial) to its shareholders, and then that spun-off unit merges with another company (Gardner Denver). In this case, it allowed for the separation of the industrial businesses into a new entity while generally avoiding immediate taxation for shareholders.

After the transactions, Ingersoll-Rand plc is now Trane Technologies plc, focusing on its climate and industrial businesses. The former industrial segment, combined with Gardner Denver, now operates as Ingersoll Rand Inc. Trane Technologies shareholders received a 50.1% ownership stake in the new Ingersoll Rand Inc.

Trane Technologies plc will no longer consolidate the financial results of the separated Industrial segment. The historical financial results of the Industrial segment prior to the distribution date will be reported as discontinued operations in Trane Technologies' consolidated financial statements starting from the first quarter of 2020.