FARMINGTON – Carrier Corp. has signed a letter of intent with Watsco, Inc. (NYSE:WSO) to form a joint venture to distribute Carrier, Bryant, Payne and Totaline HVAC products in parts of the northeast region of the U.S. Under the agreement, Watsco will contribute its northeastern locations, and Carrier will contribute its company-operated HVAC distribution business in the region to the new joint venture. Watsco will own 60 percent of the joint venture and Carrier 40 percent. Watsco is the largest distributor of air-conditioning, heating and refrigeration products (HVACR) in the U.S. Carrier, a unit of United Technologies Corp. (NYSE:UTX), is the world’s leader in high technology heating, air-conditioning and refrigeration solutions, improving the world around us through engineered innovation and environmental stewardship.
Carrier’s company-operated HVAC distribution operations to be contributed to the new venture do business in 11 northeastern states and had 2010 sales of approximately $210 million. Watsco’s northeastern business distributes parts and supplies across nine states in the northeast and had 2010 sales of approximately $60 million. The new joint venture will have approximately 350 employees and more than 40 locations.
Carrier and Watsco have an existing joint venture, Carrier Enterprise, which covers 20 states in the U.S. and selected territories in the Caribbean and Latin America.
“Carrier Enterprise performance has exceeded our expectations with sales growth outpacing the industry,” said Geraud Darnis, president of Carrier Corp. “The new joint venture in the northeast will build on this success to further grow share and profitability. It is expected to offer customers a wider portfolio of parts and supplies and unparalleled customer service.”
“We are excited to build on the success of our existing partnership with Carrier,” said Albert Nahmad, Watsco’s president and CEO. “This joint venture significantly expands our presence in the northeast market with a broad range of residential and commercial products.”
The transaction is expected to close within 45 days, subject to negotiation and execution of definitive agreements and receiving regulatory approvals.