Access control solutions manufacturer Ingersoll Rand announced on Monday that it plans to spin-off its security business, which includes Schlage, Von Duprin, Steelcraft, and Falcon among other brands, in an effort to enhance shareholder and company value.
According to a statement, the company’s board of directors has unanimously approved a plan that will create two standalone companies: Ingersoll Rand, which will focus primarily on the firm’s HVAC businesses and the "new security" company.
Under the plan, Ingersoll Rand’s commercial security business (Ingersoll Rand Security Technologies) will be combined with its residential security business (Ingersoll Rand Residential Solutions) to create a new company that is expected to have annual revenues of $2 billion.
The company said it expects the spin-off to be completed in approximately 12 months.
Ingersoll Rand Chariman and CEO Michael Lamach said the decision to spin-off was made after "an in-depth review of strategic alternatives" and will enable the companies to allocate capital and deploy resources more efficiently.
"Given the distinct strengths and strategies of the two proposed companies, the board believes that this structure will enable investors to value our different businesses separately, creating value for both companies and their shareholders," said Lamach, Ingersoll Rand’s chairman and CEO. "At the same time, it will position the new security company to build scale and make the necessary investments for the future."
Lamach will continue to serve in current role after the spin-off, according to the statement.
"The new proposed standalone companies will leverage leading market positions, well-known brands and experienced people. We believe both companies will be well positioned to better execute their respective strategic plans to capitalize on future market opportunities, serve customers, create sustainable growth, and enhance shareholder value," added Lamach.