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'@@ -1,0 +1,1 @@ +By Nathan Gomes, Kannaki Deka and David Carnevali<br> Oct 31 (Reuters) - Emerson Electric Co will sell a majority stake in its climate technologies unit to Blackstone Inc in a deal that values the business at $14 billion, as the U.S.<br>industrial firm pivots to supplying to a booming automation market.<br> The company will receive an upfront payment of about $9.5 billion, it said on Monday, which it will use to scoop up more firms, especially in the automation segment.<br> Emerson's shares edged up 1% in a weak broader market as the company also beat fourth-quarter earnings and revenue.<br> Businesses are accelerating their efforts to automate their operations amid a shortage of factory workers, and Emerson has doubled down on its software strategy to capture that shift.<br> The company sold its division that makes waste disposal equipment and hot water dispensers to Whirlpool Corp and merged its software units with smaller rival Aspen Technology .<br> Emerson, which will retain about 45% stake in the climate tech unit, said Blackstone and co-investors Abu Dhabi Investment Authority and Singapore state fund GIC would contribute $4.4 billion in equity toward the deal, which would be supplemented by $5.5 billion of debt financing.<br><br>The debt will be equivalent to about four times the new company's annual cash flow.<br> "(Emerson) is significantly re-orienting its portfolio to result in a more focused and potentially higher growth enterprise," Citi Research analysts said.<br><br>The deal, expected to close in the first half of 2023, is the latest in a flurry of private equity transactions this year as a selloff in equities on recession worries hammered valuations.<br> The Climate Technologies business, which will be [https://www.dailymail.Co.uk/home/search.html?sel=site&searchPhrase=structured structured] as a joint venture, generated net sales of $5 billion in fiscal 2022.<br> The deal values the unit at 12.7 times its cash flow in fiscal 2022, a premium to peers such as manufacturers of components and industrial companies that own [https://Www.Scribd.com/user/653881980/Lions-Heating-And-Air-Conditioning-LLC hvac kansas city] businesses, which trade at roughly 10.5 and 11.5 times, respectively.<br> "The business is poised for accelerated growth as it leads the way in helping consumers and businesses shift to more energy-efficient heating and cooling products as part of their carbon reduction efforts," global head of Blackstone Private Equity Joe Baratta said.<br> Emerson said it plans to use [https://www.Cbsnews.com/search/?q=proceeds proceeds] from the deal to invest in automation-related businesses and spend around $2 billion on share repurchases in 2023.<br> Centerview Partners LLC and Goldman Sachs are financial advisers to Emerson, while Barclays is the lead financial adviser to Blackstone.<br> (Reporting by Nathan Gomes and Kannaki Deka in Bengaluru and David Carnevali in New York; Additional reporting by Jaiveer Singh Shekhawat in Bengaluru; Editing by Shailesh Kuber, Sriraj Kalluvila and Lisa Shumaker)<br> '