Carrier and Watsco to Form Distribution Joint Venture
May 4, 2009
FARMINGTON, Conn., United States
Carrier Corp. has signed an agreement with Watsco, Inc. (NYSE:WSO) to form a joint venture to distribute Carrier, Bryant, Payne and Totaline residential and light commercial products in the U.S. sunbelt region and selected territories in the Caribbean and Latin America. Under the agreement, Carrier will separate its company-operated distribution in these regions and contribute them to the joint venture. Similarly, Watsco will contribute its Carrier distribution entity in the Midwest to the venture. Watsco will own 60 percent of the venture and Carrier 40 percent. Watsco is the largest independent distributor of air-conditioning, heating and refrigeration products (HVACR) in the U.S. with more than 60 years of proven success in the Sunbelt region. Carrier is a unit of United Technologies Corp. (NYSE:UTX).
“Carrier has the best residential distribution network in the industry. Watsco is a focused HVACR distributor with a track record of high customer satisfaction and employee empowerment,” said Geraud Darnis, president of Carrier Corp. “This partnership with Watsco presents a unique opportunity for our territories in the sunbelt region to build on the strengths of both organizations to further grow share and profitability. The combined entity is expected to offer a wider portfolio of parts and supplies and unparalleled customer service.”
The new joint venture, named Carrier Enterprises, will include Carrier-operated distribution entities in the Caribbean, Puerto Rico and 12 states of the U.S. and Watsco locations in eight states that currently distribute Carrier, Bryant and Payne products. Commercial applied field operations and company-operated residential and light commercial territories in the Northeast and California are not part of this venture. Carrier Enterprises, with pro-forma sales of $1.4 billion in 2008, will have approximately 1400 employees and 110 facilities. It will be a stand-alone entity, managed separately from other Watsco companies. Watsco will nominate three of the five members of Carrier Enterprises’ board of directors and Carrier will nominate the remaining two members.
“Carrier’s sales and distribution organization has an excellent reputation and track record in the marketplace,” said Albert Nahmad, Watsco’s president and CEO. “We are excited about forming this joint venture and are very pleased to partner with Carrier to further grow this business.”
The transaction is expected to close within 60 days subject to regulatory approvals and agreement on certain transition items.
About Carrier Corp.
Carrier Corp., headquartered in Farmington, Conn., is the world’s largest provider of heating, air-conditioning and refrigeration solutions. With 2008 revenues of $14.9 billion, Carrier has approximately 41,000 employees worldwide and operations in more than 170 countries. Carrier is part of United Technologies Corp., a Hartford, Connecticut-based provider of products and services to the aerospace and building systems industries worldwide. Visit www.carrier.com for more information.
About Watsco, Inc.
Watsco is the largest independent distributor of air conditioning, heating and refrigeration equipment and related parts and supplies in the HVAC/R industry, currently operating 412 locations serving over 40,000 customers in 34 states. Watsco's strategy provides the products, support and convenience that contractors require to satisfy the needs of homeowners and businesses that depend on the comfort and energy-efficiency provided by HVAC systems. The Company's goal is to build a national network of locations that provide the finest service and product availability for HVAC/R contractors, assisting and supporting them as they serve the country's homeowners and businesses. Additional information about Watsco may be found on its website at http://www.watsco.com.