CPP Investment board to sell Texas-based air system company for US$1.6 billion

TORONTO - The body that manages investments for the Canada Pension Plan has agreed to sell Air Distribution Technologies, Inc. to Johnson Controls in a deal valued at approximately US$1.6 billion.

Canada Pension Plan Investment Board says it expects to receive about US$1 billion in proceeds from the sale of Air Distribution.

The Dallas-based company makes air distribution and ventilation systems for buildings as well as controls for industrial and infrastructure applications.

CPP Investment Board acquired Air Distribution in 2012 for US$1.1 billion from Tomkins.

The board manages an investment portfolio that was worth about C$201.5 billion at the end of 2013. The fund's earnings from its assets will eventually be used to help pay for benefits for people covered by the Canada Pension Plan.

Johnson Controls (NYSE:JCI) says the acquisition will provide it with products that are complementary to its current heating, ventilation and air conditioning lineup.

The transaction, which is subject to certain conditions, is expected to close by the end of July.