Behind the Deal: Copeland, Formerly Emerson Climate Technologies

Seth Meisel: Copeland provides compressors and controls used for air conditioning homes and buildings, and refrigeration, as well as other related products.

The vast majority of the business—around 80 percent—is focused on replacing or upgrading existing units. This is incredibly important to energy efficiency: for example, a new residential home air conditioning system installed in the United States today is typically about 15 percent more efficient than a 10–15-year-old system that it’s replacing.

Nick Kuhar: A compressor is also a key component of a heat pump, an increasingly widely adopted, energy-efficient HVAC technology that effectively functions as a reverse air conditioner. It pumps heat into the home to warm it in colder months or releases hot air to the outside to cool it in warmer months.

These systems are powered by electricity. It’s like driving an electric car—as the electric grid increasingly moves towards more renewable sources of energy, heat pumps allow us to heat our homes with lower emissions.

SM: As this transaction shows, there is a market even in tough times for high-quality businesses. I believe it also shows Blackstone’s competitive differentiation in the market—both in our ability to do carve outs of divisions from larger businesses and corporate partnerships, and in how we finance transactions.

“As this transaction shows, there is a market even in tough times for high-quality businesses.”
Seth Meisel


One of the key challenges was that the capital markets were seizing up, making traditional deal financing sources virtually unavailable at scale. In a typical transaction, a private equity firm might rely on a financing commitment from a small handful of investment banks to underwrite the entirety of the deal—which then syndicate that financing to others down the road. That was not a viable option here given the market. And so together with our dedicated capital markets team and our partners at Emerson, we developed a unique, alternative financing strategy where Blackstone Capital Markets would raise financing directly from banks and direct lenders. That team, led by Jon Kaufman, executed on this strategy brilliantly, putting together this financing from over 30 parties without an intermediary.

NK: I think this is a deal that very few—if any—other private equity firms could do. It requires someone with Blackstone’s extensive resources, expertise, and capital base—and most importantly a long-term reputation with both lenders and sellers as a trusted partner in complex transactions.

NK: We’ve been building this partnership for well over a year. We developed a strong relationship with Emerson’s management team, highlighted Blackstone’s unique capabilities, and aligned with them on the go-forward, post-closing vision for Copeland which made us Emerson’s partner of choice. Copeland is a very high-quality business and a leader in its market, but it was no longer part of Emerson’s core strategy. We all believed it was best suited to thrive as a standalone business rather than part of a larger company— so it could benefit from focused attention and investment.  

SM: We have a long history of successful corporate partnerships and carve outs—like our transaction with Thomson Reuters for its former “Financial & Risk” business that is now known as Refinitiv—and we take a collaborative approach. We have a deep bench of investment and operating professionals to evaluate large and complex transactions, giving our partners confidence we’ll be able to get these kinds of deals done and deliver value for all parties. In a corporate partnership like this, the seller retains a stake in the business, so they also share in the potential upside going forward.