|
|
|
(State or other jurisdiction of incorporation)
|
(Commission File Number)
|
(IRS Employer Identification No.)
|
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
|
|
|
Item 8.01
|
Other Events.
|
Item 9.01
|
Financial Statements and Exhibits.
|
Exhibit No.
|
Description
|
Unaudited pro forma condensed combined statement of operations of Ingersoll Rand for the three months ended March 31, 2020 and the notes related thereto giving
effect to the Transactions
|
|
104
|
Cover Page Interactive Data File (embedded within the Inline XBRL document and included in Exhibit 101)
|
INGERSOLL RAND INC.
|
||
By:
|
/s/ Andrew Schiesl
|
|
Andrew Schiesl
|
||
Senior Vice President, General Counsel, Chief Compliance Officer, and Secretary
|
• |
Internal reorganization of Trane to separate and consolidate specified assets and liabilities used in the Ingersoll Rand Industrial business under Ingersoll Rand
Industrial (the “Separation”);
|
• |
Incurrence of Ingersoll Rand Industrial debt;
|
• |
Distribution of Ingersoll Rand Industrial common stock pro rata to Trane stockholders (the “Distribution”); and
|
• |
Merger of Charm Merger Sub, Inc., a wholly-owned subsidiary of the Company, with and into Ingersoll Rand Industrial, with Ingersoll Rand Industrial surviving the
merger as a wholly-owned subsidiary of the Company (the “merger”).
|
• |
The unaudited pro forma condensed combined statement of operations for the three months ended March 31, 2020 was prepared based on
|
(1) |
the historical unaudited condensed consolidated statement of operations of Ingersoll Rand for the three months ended March 31, 2020; and
|
(2) |
the historical unaudited condensed combined statement of operations and comprehensive income of Ingersoll Rand Industrial for the period from January 1, 2020 to
February 29, 2020 as derived from the historical records of Ingersoll Rand Industrial.
|
Historical
Ingersoll Rand
|
Historical
Ingersoll
Rand
Industrial
(1/1/2020 –
2/29/2020)
|
Pro Forma
Adjustments
|
Note 5
|
Pro Forma
Combined
|
|||||||||||||
Revenues
|
799.9
|
469.9
|
-
|
1,269.8
|
|||||||||||||
Cost of sales
|
555.4
|
312.7
|
(39.8
|
)
|
(a)
|
827.9
|
|||||||||||
(0.4
|
)
|
(b)
|
|||||||||||||||
Gross Profit
|
244.5
|
157.2
|
40.2
|
441.9
|
|||||||||||||
Selling and administrative expenses
|
155.4
|
107.3
|
(0.1
|
)
|
(b)
|
262.6
|
|||||||||||
Amortization of intangible assets
|
55.2
|
9.8
|
10.4
|
(c)
|
75.4
|
||||||||||||
Other operating expense, net
|
100.7
|
3.8
|
(42.3
|
)
|
(d)
|
62.2
|
|||||||||||
Operating (Loss) Income
|
(66.8
|
)
|
36.3
|
72.2
|
41.7
|
||||||||||||
Interest expense
|
27.1
|
-
|
8.1
|
(e)
|
35.2
|
||||||||||||
Loss on extinguishment of debt
|
2.0
|
-
|
-
|
2.0
|
|||||||||||||
Other income, net
|
(0.2
|
)
|
-
|
-
|
(0.2
|
)
|
|||||||||||
(Loss) Income Before Income Taxes
|
(95.7
|
)
|
36.3
|
64.1
|
4.7
|
||||||||||||
(Benefit) provision for income taxes
|
(58.9
|
)
|
9.4
|
54.4
|
(f)
|
4.9
|
|||||||||||
Net (Loss) Income
|
(36.8
|
)
|
26.9
|
9.7
|
(0.2
|
)
|
|||||||||||
Less: Net income attributable to non-controlling interests
|
-
|
0.8
|
-
|
0.8
|
|||||||||||||
Net (Loss) Income attributable to Ingersoll Rand Inc.
|
(36.8
|
)
|
26.1
|
9.7
|
(1.0
|
)
|
|||||||||||
Basic (loss) earnings per share
|
$
|
(0.13
|
)
|
(g)
|
$
|
-
|
|||||||||||
Diluted (loss) earnings per share
|
$
|
(0.13
|
)
|
(h)
|
$
|
-
|
|||||||||||
Weighted average shares, basic
|
277.3
|
(g)
|
416.6
|
||||||||||||||
Weighted average shares, diluted
|
277.3
|
(h)
|
416.6
|
Note 2:
|
Basis of presentation
|
Note 3:
|
Financing transactions
|
Note 4:
|
Purchase price accounting and merger consideration
|
Purchase Price
|
||||
Fair value of Ingersoll Rand common stock issued for Ingersoll Rand Industrial outstanding common stock
(1)
|
$
|
6,919.5
|
||
Fair value attributable to pre-merger service for replacement equity awards (2)
|
8.6
|
|||
Fair value attributable to pre-merger service for deferred compensation plan (3)
|
8.9
|
|||
Total purchase consideration
|
6,937.0
|
|||
Purchase Price Allocation
|
||||
Cash
|
$
|
41.3
|
||
Accounts receivable
|
579.9
|
|||
Inventory
|
576.2
|
|||
Other current assets
|
136.9
|
|||
Property, plant and equipment
|
520.0
|
|||
Goodwill
|
4,278.2
|
|||
Intangible assets
|
4,501.3
|
|||
Other non-current assets
|
269.8
|
|||
Total current liabilities
|
(830.6
|
)
|
||
Deferred tax liability
|
(900.6
|
)
|
||
Long-term debt, net of debt issuance costs
|
(1,851.7
|
)
|
||
Other non-current liabilities
|
(310.4
|
)
|
||
Non-controlling interest
|
(73.3
|
)
|
||
$
|
6,937.0
|
(1) |
Represents the fair value of 211,023,522 shares of the Company’s common stock issued for Ingersoll Rand Industrial outstanding common stock multiplied by
$32.79, the price per share of common stock as of the closing price on February 28, 2020.
|
(2) |
Represents the fair value of the replacement equity awards to the extent those related to services provided by the employee of Ingersoll Rand Industrial prior to
closing.
|
(3) |
Represents the fair value of the deferred compensation plan to be settled in equity.
|
(a) |
Reflects $39.8 million reduction of Cost of sales for the removal of inventory step-up amortization as this amount is not expected to have a continuing impact on
Ingersoll Rand’s operations. The preliminary fair value step-up of $102.3 million of inventories is amortized to Cost of sales as the inventory is sold, which is expected to be a period of four months from the acquisition date.
|
(b) |
Reflects the reduction in depreciation expense of $0.4 million to Cost of sales and $0.1 million to Selling and administrative expenses based on the estimated fair
value step-up of the depreciable fixed assets acquired and assigned estimated remaining useful lives.
|
(Dollars in millions)
|
Carrying
value
|
Preliminary
fair value
|
Step-up
|
Average
remaining
useful lives
(years)
|
Reduction of
depreciation
expense for the
period 1/1/2020-
2/29/2020
|
|||||||||||||||
Land and land improvements
|
$
|
19.7
|
$
|
38.8
|
$
|
19.1
|
18
|
$
|
-
|
|||||||||||
Buildings
|
155.2
|
177.4
|
22.2
|
28
|
0.1
|
|||||||||||||||
Machinery and equipment
|
207.4
|
255.9
|
48.5
|
10
|
(0.5
|
)
|
||||||||||||||
Office furniture and equipment
|
8.9
|
13.2
|
4.3
|
8
|
(0.1
|
)
|
||||||||||||||
Other
|
0.7
|
0.9
|
0.2
|
7
|
-
|
|||||||||||||||
Construction in progress
|
30.1
|
33.8
|
3.7
|
N/A
|
-
|
|||||||||||||||
Total
|
$
|
422.0
|
$
|
520.0
|
$
|
98.0
|
$
|
(0.5
|
)
|
(c) |
Reflects the net pro forma adjustment of $10.4 million for the removal of $35.0 million of historical amortization expense offset by new amortization expense of
$45.4 million based on the estimated fair value of the definite life intangible assets and the respective assigned estimated useful life.
|
(Dollars in millions)
|
Carrying
Value
|
Step-up
|
Estimated
Fair
Value
|
Estimated
weighted
average
useful life
(years)
|
Pro forma
amortization
for the three
months
ended March
31, 2020
|
|||||||||||||||
Trade names
|
$
|
211.2
|
$
|
1,215.8
|
$
|
1,427.0
|
Indefinite
|
$
|
-
|
|||||||||||
Developed technology
|
17.0
|
128.0
|
145.0
|
6
|
6.3
|
|||||||||||||||
Customer relationships
|
542.2
|
2,262.8
|
2,805.0
|
21
|
37.2
|
|||||||||||||||
Backlog
|
-
|
90.9
|
90.9
|
< 1
|
-
|
|||||||||||||||
Other
|
42.5
|
(9.1
|
)
|
33.4
|
4
|
1.9
|
||||||||||||||
Total acquired intangible assets
|
$
|
812.9
|
$
|
3,688.4
|
$
|
4,501.3
|
$
|
45.4
|
||||||||||||
Less: historical Ingersoll Rand Industrial amortization (January 1, 2020 - February 29, 2020)
|
9.8
|
|||||||||||||||||||
Less: historical Ingersoll Rand Industrial (March 1, 2020 - March 31, 2020)
|
25.2
|
|||||||||||||||||||
Total historical amortization expense
|
35.0
|
|||||||||||||||||||
Pro forma adjustment
|
$
|
10.4
|
(d) |
Reflects the pro forma adjustment to remove $42.3 million of transaction costs incurred by Ingersoll
Rand directly attributable to the acquisition of Ingersoll Rand Industrial and that will not have an ongoing impact on the combined business.
|
(e) |
Reflects the pro forma adjustment to Interest expense, net to reflect a $7.4 million increase in interest expense resulting from interest on the new term debt to
finance the acquisition of Ingersoll Rand Industrial and $0.7 million in amortization of related debt issuance costs.
|
A sensitivity analysis on interest expense has been performed to assess the effect that a hypothetical 0.1% change in interest rates
would have on the Ingersoll Rand Industrial Term Loan Facility. A 0.1% change in the interest rates would cause a corresponding increase or decrease to interest expense of approximately $0.5 million for the three months ended March 31,
2020. See Note 3 for further discussion on the financing transactions.
|
(f) |
Income tax
expense: The tax effect of the pro forma adjustments was determined based on the total estimated effective income tax provision of the combined company calculated using the Company’s estimated annual effective tax provision. The estimated annual effective tax rate is due to the mix of losses in countries with limited tax benefits combined with profits in countries with higher tax costs.
|
(g) |
Basic weighted average number of shares outstanding: Reflects the impact on the weighted average
shares outstanding for the three months ended March 31, 2020 for the pro forma issuance of 211.0 million shares of Ingersoll Rand common stock issued in
exchange for Ingersoll Rand Industrial outstanding common stock in accordance with the Merger Agreement.
|
(h) |
Diluted weighted average number of shares outstanding: Reflects the impact on the weighted average
shares outstanding for the three months ended March 31, 2020 for the pro forma issuance of 211.0 million shares of Ingersoll Rand common stock issued in
exchange for Ingersoll Rand Industrial outstanding common stock. Due to the net loss in the three-month period ended March 31, 2020, potentially dilutive instruments would be anti-dilutive. Accordingly, the pro forma dilutive loss per
share is the same as basic loss per share for the three-month period ended March 31, 2020.
|
Document and Entity Information |
Jun. 05, 2020 |
---|---|
Cover [Abstract] | |
Document Type | 8-K |
Amendment Flag | false |
Document Period End Date | Jun. 05, 2020 |
Entity Registrant Name | Ingersoll Rand Inc. |
Entity Incorporation, State or Country Code | DE |
Entity File Number | 001-38095 |
Entity Tax Identification Number | 46-2393770 |
Entity Address, Address Line One | 800-A Beaty Street |
Entity Address, City or Town | Davidson |
Entity Address, State or Province | NC |
Entity Address, Postal Zip Code | 28036 |
City Area Code | 704 |
Local Phone Number | 655-4000 |
Written Communications | false |
Soliciting Material | false |
Pre-commencement Tender Offer | false |
Pre-commencement Issuer Tender Offer | false |
Entity Emerging Growth Company | false |
Entity Central Index Key | 0001699150 |
Title of 12(b) Security | Common Stock, Par Value $0.01 Per Share |
Trading Symbol | IR |
Security Exchange Name | NYSE |
YL_E$I7[(7S"7WSUO @"%F2>': +(:/X;>CP5DZA_,#'_!2X%+IG+<&E13K8Y+&*JVR#.
M.% T%U$^TH0DS_D?G/WOE^<$EREYL@PAI_^[62+'J!"B'WZZ(PJH1<&. \XQ
MU:N,+7VXF,UVAY^J8MS'K.WM1+UY'64VI0YG:&2S*75RE9J O?WSX7M\V?RX_SK)<'_KO_U@2Q<_O3U\L^KZQ^?SC^K
MRL<^]F4HN-H) Q_7=1$*T'IZ">:?)CQW+Y#Z@(L HPVMAG*HFOUTV23%DEN>
M&M$QYF[\Q>,BEO4JTU*!Q4=1)F9>W^Q:U+8]RX*_Z,!P7.;T;=9Q/6KTW!WN
M"U.Q+(\K1]_F6\!(5S"C<;& *W]^37(!S#R'5;)K=N &]/_G']H6L-.E:O;W5L?X#?>D;/
MLBW?ZYNT/SBI43[)8=VP1,Y0,>+0DVKA+-U:;QNK3UOFI,;4B1&-K8PM@.EV
M7ZQ%" 4P^,!Q_;A7@*?@ @Q'N]B8W#WB-Y"6\ -I5A
M:\%X0H$L(&1ANKN<\KYB!OSOOPPLL_^:ST4Q9[Z]\%A9"L"+H D>FX1,$ 7\
M>BRE0)F,LXQT7,0+H?1 "".
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M3^6N/EE$3/6;\+;0*R%&!RX8[;S[NP,)-YSX!0T, "DU[&9'W@%KJ.I2+KQC@U3OAN=#L?9$MD
M_F.VN]N9:+=:8^_UZ&5Y>C&\!5&PD!3(.AX'S:.WLO";/X3%U2GH-59L2V44
MQ"PD#2#8V:\R?< .RRN:LRXJZOE)CA,N\Q+JC@*&.0 65XM6#ET"Z7>'@X[9
MLQS/MIT>&QA^=V#W:E#8[MR:/ >&32X!K(Z
M-H2@5GHP6=!MSTNZ8+EP K,#QDXD^O-Z[6.*S]7@<]4HDS11K=F87N7%'@ZN
M093#>0;_/(Z,6?'\#K@"ZRC\:U >?#6L_K'5+18$,^]BJ]<>EOL7A2SD"FI1
M> :PS;$;B.I8$356X_)']'W1M Q UGE;I>.Q=#^.P;S\@Q'6;=[MX-XFL3%0(K?,!V-B[7X789
MA-\M+A (<-8)@V@CR?-BJ]VW?VN3*\CPA6/HGK(7$*B&\9U("/TLP6'RLAB\
M@+L9YP)'T;Q!+#""4,M1H2BA"ED^.=C;:HAA#YS.@ Z=89_YMNWU!X;%C([9
M8
9U(^ZZD#_.BMWS
MM] HPLKH_&65M[3);H1Z71D;J*4!S3X6_KULE@*/@Y_(=ABC(T,_(482D@#=
M Q:AL:8J*O'PN,,BY@=IJ:XO;@'.Q-7EAT?!#5IK?+:(7]%7MN:2MEU.HZ
MWL"R;6HSQZ>695I#R^P,!JY%??^H3>S-9WBDBJ49$2A>W?D:GA0DD!PEV*C.OZ,*#?:)*6)!/YI$BG
MJ !/M(BG>F0U(*< -ZFC#M4PEW($&%>,D4VKMIIP<9X"#&KX6)7>*(>^0#N%
M$.BMR(0$!=++8(J)B6:..T['0+V[_QG>WW;YM,7PP"2[GHQ]DXK#-(YL'((Y
MH@(S'T?
Q
MDEHF4/^1TJAZ#C-%-4/S= DWH%R$Q L8 34(?ZHHBX4>B[CMA_XS1M=?_AVX
M+R8?\0,X9J
M6#D\.#N*44L7=U+A07: :_3>"E:_"<.R 7.8V=OBUA/<@J52ME#8\N#X",?O
M#]>A.VO0??RW@ZIS::-ZWBT5'N5&N,;W#D+S'KE/$!S$OF&/LZ$XMJ$X0,5)
M*.VE8$\!SMJZ/<'1.8ZC;AE8NQ/OZ=4#K./3?CO=?'W=QW\3^5@"#SX"ZQ?P
M;DKZR]C]N]'_B^ZX^C3K]=:PO)D:J51CF.
DCF.#>]R52#$