Carrier Global (NYSE:CARR) confirmed Tuesday after the close that it has agreed to acquire Viessmann Climate Solutions for €12 billion (€1 = $1.1055) in cash (80%) and stock (20%) issued directly to Viessmann Group with a long-term ownership commitment.
Carrier said the deal positions it "to lead in the rapid climate and energy transition in Europe, which is driving sustainable market growth" and adds a "premier asset in the European climate transition market" to its portfolio.
Following the announcement, Mizuho analysts maintained a Buy rating and $53 price target on the stock, telling investors in a note that they "applaud the bold move - selling low-growth, low-margin businesses, buying high-growth, higher-margin at a reasonable valuation."
"The deal enables CARR to continue capitalizing on its leadership position within the European Heat Pump Market as well as expanding exposure to the Europe Energy Transition Market. Viessman's exposure sets them up to capitalize on the fastest-growing Heat Pump markets in Europe," the analysts wrote.
At Oppenheimer, analysts reiterated an Outperform rating on CARR, stating that it will "become a more focused, global HVACR player through (1) the pending acquisition of Viessmann Climate Solutions and (2) the planned divestitures of substantially all its Fire & Security and Commercial Refrigeration businesses."
"The Viessmann deal, while substantially increasing near-term leverage, should accelerate CARR's revenue growth trajectory and support leadership in the European climate and energy transition, notably in heat pumps; the deal multiple looks initially in line with recent large M&A trends," said the analysts.