Florida-based HVAC/R products distributor Watsco to form JV with Carrier Corp. that will include Carrier's northeast U.S. HVAC distribution network; Watsco to own 60%, transaction to close within 45 days
March 2, 2011
– Watsco, Inc. (NYSE:WSO) (Paris:WSO) today announced that it has executed a letter of intent to form a joint venture that will include Carrier Corporation's (NYSE:UTX) company-operated HVAC distribution network in the northeast United States. Following the transaction, Watsco will own 60% and Carrier 40% of this joint venture. The transaction is expected to close within 45 days and is subject to the completion of a definitive agreement and receiving customary regulatory approvals.
Carrier's company-operated northeast distribution network had revenues of approximately $210 million in 2010, with 230 employees serving 11 states from 28 locations, including New York, New Jersey, Connecticut, Rhode Island, Massachusetts, New Hampshire, Vermont, Maine and portions of Ohio, Pennsylvania and West Virginia. Products sold include a broad offering of Carrier, Bryant and Payne-brand residential, light-commercial and applied-commercial systems, along with related parts and supplies. Watsco has also agreed to contribute to this joint venture its northeastern locations, which serve customers in New York, New Jersey and all of New England with 2010 revenues of approximately $60 milion.
Albert Nahmad, Watsco's Chairman and Chief Executive Officer, commented: "We are excited to build on the success of our partnership with Carrier and to significantly expand our presence in the Northeast market with a broad offering of residential and commercial products. This marks another important step in building a national network of locations and presents great potential to capitalize on energy conservation opportunities in one of the most populated markets in the U.S."
Geraud Darnis, President of Carrier Corporation, said: "Carrier Enterprise's performance has exceeded our expectations with sales growth outpacing the industry. The new joint venture in the northeast will build on this success to further grow share and profitability. It is expected to offer customers a wider portfolio of parts and supplies and unparalleled customer service."
Watsco improves indoor living and working environments with air conditioning and heating solutions that provide comfort regardless of the outdoor climate. Our solutions also promote healthier indoor spaces by removing pollutants from the indoor air that can lead to asthma, allergies and reductions in productivity. Furthermore, since heating and cooling accounts for approximately 56% of the energy consumed in a typical United States home, we offer consumers the greatest opportunity to save money on energy by replacing existing air conditioning and heating systems with more energy efficient and environmentally friendly solutions.
There are approximately 74 million central air conditioning and heating systems installed in the United States that have been in service for more than 10 years. Older systems often operate below government mandated energy efficiency and environmental standards. Watsco has an opportunity to accelerate the replacement of these systems at a scale greater than our competitors as the movement toward reducing energy consumption and its environmental impact continues. As the industry leader with over 500 locations in the United States and Puerto Rico, with additional market coverage on an export basis to parts of Latin America and the Caribbean, significant growth potential remains given that our current revenue run-rate is less than 10% of the estimated $30 billion United States market for HVAC/R products. Additional information about Watsco may be found at www.watsco.com.
Carrier Corporation is the world's leader in high technology heating, air-conditioning and refrigeration solutions. Carrier experts provide sustainable solutions, integrating energy-efficient products, building controls, and energy services for residential, commercial, retail, transport and foodservice customers. Founded by the inventor of modern air conditioning, Carrier improves the world around us through engineered innovation and environmental stewardship. Carrier is a unit of United Technologies Corp., a leading provider to the aerospace and building systems industries worldwide. Visit www.carrier.com for more information.
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