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By Euan Rocha
TORONTO, April 16 (Reuters) - Johnson Controls Inc said on Wednesday it will acquire Air Distribution Technologies from Canada Pension Plan Investment Board (CPPIB) for $1.6 billion, in a move aimed at expanding its offerings in the ventilation products segment.
Milwaukee, Wisconsin-based Johnson Controls, which makes car interiors and batteries as well as heating, ventilation and cooling systems for buildings, said the acquisition reflects its commitment to invest in the buildings business as a growth platform.
"This investment expands Johnson Controls' position in the buildings space with additional products that are complementary to our existing heating, ventilation and air conditioning offerings," said the diversified manufacturer's Chief Executive Alex Molinaroli, in a statement.
Canadian pension fund manager CPPIB had acquired Dallas-based Air Distribution business from Tomkins in 2012 for $1.1 billion, of which about $500 million was funded with equity from CPPIB.
Upon closing of the proposed deal with Johnson Controls in July, CPPIB expects to receive proceeds of about $1 billion.
The transaction comes just days after CPPIB and Canadian private equity firm Onex Corp agreed to sell industrial conglomerate Gates Corp to private equity firm Blackstone Group LP for $5.4 billion.
Auto-parts and building-products maker Gates is a division of Tomkins, which Onex and CPPIB jointly bought in 2010 for about $5 billion. That sale is also expected to close later this year, the companies said in early April.
CPPIB, one of Canada's top pension fund managers with more than C$192.8 billion ($176 billion) in assets under management, said the sale of Air Distribution Technologies remains subject to customary closing conditions and regulatory approvals.
Johnson Controls was advised by Goldman Sachs on strategic and financial aspects of the transaction, while Cleary Gottlieb Steen & Hamilton acted as its as legal representatives.
$1 = 1.0979 Canadian Dollars Additional reporting by Mridhula Raghavan in Bangalore; Editing by Saumyadeb Chakrabarty and Alden Bentley