(Reuters) – Industrial conglomerate Ingersoll Rand is in late-stage discussions with private equity firm Clayton Dubilier & Rice to sell its Hussmann refrigeration business, two people familiar with the matter said.
The value was not immediately clear on Tuesday. Hussmann — which provides supermarkets and food retailers with display cases, refrigeration systems and beverage coolers — is likely to be valued at less than $750 million, people familiar with the business told Reuters previously.
Ingersoll Rand Chief Executive Mike Lamach said on July 21 that the company was on track to sell Hussmann by the end of the third quarter, but would not comment on a buyer nor the price it would likely fetch.
Reuters reported in March that Ingersoll Rand hired JPMorgan Chase & Co to sell Hussmann and the auction drew interest from private equity firms.
Platinum Equity was among the buyout firms interested in Hussmann, but it is no longer involved in the process, one of the people said.
Representatives for CD&R and JPMorgan declined to comment. Ingersoll Rand and Platinum were not available for comment.
The refrigeration display business is considered highly cyclical and exposed to rising raw material costs. Grocery stores and other food retailers held back on new investment during the recent economic downturn, squeezing margins for Hussmann and its rivals.
Ingersoll Rand also sold its KOXKA European refrigerated display business in late 2010 to a unit of American Industrial Acquisition Corporation.
Hussmann, founded in 1906 by Harry Hussmann, was sold to Ingersoll Rand in 2000 for $1.55 billion in cash.
Ingersoll does not break out Hussmann revenues, but the conglomerate’s refrigeration equipment business, which also includes Thermo King transport equipment, recorded 2010 sales of $1.9 billion.
(Soyoung Kim and Megan Davies; additional reporting by Michael Erman. Editing by Robert MacMillan)