Carrier Global Corporation (NYSE:CARR) disclosed on Thursday its plan to sell Commercial and Residential Fire business to an affiliate of Lone Star Funds for $3 billion.

The sale of Carrier's Commercial and Residential Fire business is a key step in its portfolio transformation following the January acquisition of Viessmann Climate Solutions and the divestiture of its Industrial Fire and Global Access Solutions units.

The transaction, expected to close by the end of 2024, is subject to regulatory approvals and standard conditions.

Following its acquisition of Viessmann Climate Solutions, Carrier has cut its net debt by over $5 billion, including through last week's debt tender.

With significant de-leveraging this year, the company plans to use the estimated $2.2 billion in net proceeds from the sale for share repurchases.

Carrier Chairman & CEO David Gitlin said, "The sale of our Commercial and Residential Fire business marks a defining step in our planned business exits critical to our transformational journey to becoming a focused, agile, higher-growth, pure-play company dedicated to creating a more sustainable world for generations to come."

"We now have executed deals on all our divestitures, all signed within about a year of announcement, with a combined value of over $10 billion, representing a mid-teens EBITDA multiple in aggregate."

In July, Carrier reported that second-quarter net sales rose 12% Y/Y to $6.70 billion, missing the $7.00 billion consensus, and adjusted EPS of $0.87 beat the $0.84 consensus.

Investors can gain exposure to the stock via First Trust US Equity Opportunities ETF (NYSE:FPX) and Carbon Collective Climate Solutions U.S. Equity ETF (NASDAQ:CCSO).

Price Action: CARR shares closed higher by 4.14% at $68.40 on Thursday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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