Johnson Controls Plans To Divest Global Workplace Solutions Business

(RTTNews) - Auto parts supplier Johnson Controls, Inc. (JCI) announced Tuesday that it intends to divest its Global Workplace Solutions or GWS business as part of its stated intention to divest businesses that are non-core to its long-term growth strategy.

Johnson Controls said it has retained Bank of America Merrill Lynch as exclusive financial advisor to assist in the divestiture and to identify potential buyers.

"GWS is a strong business and a leader in its market with tremendous potential to grow. As we've focused on it this past year to understand what is needed to win long-term, it is clear that GWS is really an exclusively service-based business and not core to our manufacturing, engineering and product-based portfolio. This is a win-win all around," President and CEO Alex Molinaroli said in a statement.

The GWS business provides on-site management of real estate and energy use for large multinational companies around the world. It brings in $5 billion in sales but the company is divesting the business as it doesn't earn much profit.

GWS has been part of Johnson Controls' portfolio for more than 20 years, and will continue to be a close partner to Johnson Controls as both a supplier and a customer.

Milwaukee, Wisconsin-based Johnson Controls' new CEO Molinaroli has been pushing for rapid changes in the one year that he has been at the helm. He has been busy buying and selling small pieces of business. Molinaroli is reportedly seeking to rely less on the auto industry and invest to expand the building business.

Johnson Controls bought Air Distribution Technologies of Texas for $1.6 billion in June, and has announced a joint venture with Hitachi that will allow it to sell the Japanese company's highly efficient heating and cooling equipment products. It also divested its automotive electronics business, and conducted a major restructuring of the building efficiency business.

In Tuesday's regular trading session, JCI is currently trading at $44.15, down $0.24 or 0.54% on a volume of 0.41 million shares.