Skip to comments.Cooper Industries to be sold for $11.8 billion
Posted on 05/22/2012 9:05:41 AM PDT by thackney
Cooper Industries, a manufacturer of lighting and electrical-distribution equipment that has been run out of Houston for 47 years, will be acquired by Ohio-based Eaton Corp. in a cash-and-stock deal valued at nearly $12 billion, the companies announced Monday.
We are extremely pleased to become part of Eatons global electrical business, Coopers locally based chairman and CEO Kirk Hachigian said in a statement.
The companies expect the $11.8 billion transaction to be completed in the latter half of the year. Both sides stressed the multiple ways the companies complement each other, particularly on the growing international side of their respective businesses.
This combination creates endless opportunities to accelerate growth and serve our global customers through combining technology, distribution, penetrating important vertical industries and entering new emerging markets, Hachigian said. The two companies are a perfect fit in every respect.
Cooper, which was founded in Ohio in 1833, moved its headquarters to Houston in 1965. It reincorporated in Bermuda in 2001 and then in Ireland in 2009, although its top management remained in Houston.
In 2009, as the company was announcing another round of layoffs, Cooper reported that just 200 of its 30,000 employees were based in Houston.
The company today employs 26,000 people and has manufacturing facilities in 23 countries. It generated $5.4 billion in revenue last year on everything from fluorescent garage lights to equipment used in electrical plants.
It owns a variety of brands, including Halo, Kyle Overhead Switchgear and McGraw-Edison, which makes outdoor LED products for commercial, utility and industrial customers.
New name coming?
If approved by shareholders, the combined company also will be formally incorporated in Ireland and will be led by Eatons current chairman and CEO Alexander Cutler, probably under the name Eaton Global.
Eaton describes itself as a power-management company. Spokesman Gary Klasen said the electrical side of its business has grown over the last several year and now accounts for about half of its total revenues.
Cooper and Eaton, which has nearly three times as many employees and does business in more than 150 countries, reported the combined companies would have generated $21.5 billion last year.
Hachigian, who was identified by the Chronicles annual compensation survey as Houstons highest-paid corporate leader in 2010, receiving $25 million in total compensation, will remain in charge at Cooper until the acquisition is complete, Klasen said. He has agreed to remain as part of the management team during the transition period to follow.
Local impact unknown
Other than that, Klasen said, it is too early to say what kind of impact the acquisition would have in Houston. A Cooper executive designated as the contact person for information related to the deal did not return calls for comment.
Klasen said there would be no impact on the companys work force or management in Cleveland, where Eaton has had a presence for 97 of its 101 years.
Klasen said that because of both companies significant global footprint accounting for 60 percent of Eatons current business and 40 percent of Coopers the decision to incorporate in Ireland offers significant flexibility in cash management. Those savings were estimated at $160 million annually, including tax savings, through 2016.
Coopers stock closed at $69.88 per share Monday, up $14.04 for the day. Eatons stock closed at $42.09 per share, down 31 cents. Based on Fridays closing price for Eaton, Cooper shareholders will get cash and stock worth $72 per share. That represents a 29 percent premium over Coopers Friday close.
>> has been run out of Houston for 47 years <<
Took so long to run them out of town? A good sheriff’s posse probably could have done the job in a few days!
Most of the lighting fixtures at the hotel where I work part time were made by Cooper.