NEW YORK (The Deal) -- As part of its promise to streamline operations, Cameron International (CAM - Get Report) said Monday it agreed to sell its centrifugal compression business to Ingersoll-Rand (IR - Get Report) for $850 million.
The unit makes and provides services for centrifugal compressors in several industries around the world. It generated almost $400 million in sales last year and was expected to have Ebitda of $80 million next year. It employs 850.
Swords, Ireland-incorporated Ingersoll-Rand, which has its executive offices in Davidson, N.C., said separately that the acquisition will immediately boost earnings per share, Ebitda margins and return on invested capital and expand its compression offerings into air separation, petrochemicals, chemicals and process gas. It plans to fund the deal with cash on hand and debt.
"Cameron's centrifugal compression division offers complementary product, manufacturing and engineering strengths as well as financial synergies that make it a natural fit into our core business and will provide meaningful value to our shareholders," Ingersoll-Rand chairman CEO Michael Lamach said in a statement.
Houston-based Cameron said it decided to sell the unit after review of its long-term strategy to increase its focus on its core markets and that its goal was to identify a buyer that is more closely aligned with its broad and global markets. Cameron chairman, CEO and president Jack Moore said in a statement that Ingersoll Rand sees a "strong strategic fit" for its business.
A source said Cameron ran a full auction process that attracted many bidders, both strategic and financial and domestic and international.