ATLANTA (October 19, 2018)—Chart Industries, Inc., has signed a definitive agreement to divest its oxygen-related products business within its BioMedical segment to NGK Spark Plug Co., Ltd. (NGK Spark Plug) for $133.5 million. The sale is expected to close within the fourth quarter of 2018, following the satisfaction of customary closing conditions, including regulatory requirements.
The BioMedical segment has two product categories, oxygen-related or respiratory and cryobiological. Respiratory products include portable, stationary and liquid concentrators and are approximately $150 million of annual revenue, Chart’s president and Chief Executive Officer, Jill Evanko, said during an October 2, 2018 strategic update conference call. The cryobiological products are approximately $80 million of revenue and are used for storage and transport for animal breeding and life sciences applications.
The strategic decision to divest the oxygen-related products business reflects Chart’s strategy and capital allocation approach to focus on its core capabilities and offerings. The sale of the oxygen-related products is a reallocation of capital from the respiratory business to a strategic addition to Chart, VRV s.p.a., for which a definitive acquisition agreement was announced in late September. In conjunction with this reallocation of capital to Chart’s businesses, the realignment of segmentation geographically will support the significant growth opportunities and cost synergies that VRV brings to Chart as well as the anticipated 5 to 7 percent organic growth in 2019.
“This is a logical next step for our business and a strategic decision that will further enable us to concentrate on our core businesses that share common customers, technologies and end markets," Evanko said in a press statement. "We are excited to have a strategic buyer in NGK Spark Plug, in particular given their commitment to support and expand their oxygen-related products business.”
Stated during the conference call, the respiratory business...increasing focus on business-to-consumer sales is different than the core Distribution & Storage and Energy & Chemicals businesses.
NGK reportedly is focusing on next generation battery technology as well.
A portion of the BioMedical segment related to Chart’s cryogenic products and technological expertise (Cryobiological) is excluded from the sale. Chart’s Cryobiological product line will be managed by and report through the Distribution & Storage Western Hemisphere segment, effective immediately.
Credit Suisse served as exclusive financial advisor and Winston & Strawn LLP served as legal advisor to Chart.
For more information, visit the Chart website at chartindustries.com under “investor relations.”
Chart is a global manufacturer of highly engineered equipment for the industrial gas, energy and biomedical industries. The majority of Chart's products are used throughout the liquid gas supply chain for purification, liquefaction, distribution, storage and end-use applications, a large portion of which are energy-related. Chart has domestic operations located across the United States and an international presence in Asia, Australia, Europe and Latin America.
For more information, visit chartindustries.com.