(Bloomberg) — Activist investor Elliott Investment Management has built a large position in industrial giant Johnson Controls International Plc, whose performance has lagged its peers, according to people familiar with the matter.
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The hedge fund’s position is worth more than $1 billion, putting it among the top 10 investors of the company, the people said, asking not to be identified discussing private information.
A representative for Johnson Controls didn’t immediately respond to a request for comment outside regular business hours. A spokesperson for Elliott declined to comment.
Shares of Johnson Controls have risen 9.2% in the past year, giving it a market value of about $46.5 billion as of Friday. Peers such as Carrier Global Corp. and Lennox International Inc. have seen their stocks appreciate more than 50% during the same period.
Johnson Controls, along with rivals Carrier and Lennox, are leading players in HVAC control, which has seen a boom because it’s crucial in cooling data centers. The climate-control equipment is also used in semiconductor and electric vehicle manufacturing facilities.
The company, incorporated in Ireland and with main offices in Milwaukee, is led by Chief Executive Officer George Oliver, who was CEO of Tyco International before it combined with Johnson Controls in 2016. Since 2020, Johnson Controls has seen senior executive turnovers including for chief financial officer. Marc Vandiepenbeeck was appointed to the role this year.
While Elliott’s intentions for the stake couldn’t immediately be learned, several of its recent investments precipitated C-suite turnovers.
Sensata Technologies Holdings Plc’s CEO departed last month after the company reported a cooperation agreement with Elliott, according to a statement. The CEO of Crown Castle Inc., which is facing a proxy battle against its founder, announced his retirement weeks before a settlement agreement with Elliott, while NRG Energy Inc.’s president and CEO departed from management and board positions as the company entered into a pact with Elliott.
Johnson Controls produces fire detection, refrigeration, security and HVAC equipment, mainly in commercial buildings.
The company is in the process of selling heating and ventilation assets worth about $5 billion that have drawn interest from Lennox and Robert Bosch GmbH, Bloomberg News reported in March. Johnson Controls is also weighing the sale of its ADT alarms unit, Reuters has reported.
Johnson Controls this month reaffirmed its full-year forecast for adjusted earnings per share of about $3.60 to $3.75 after cutting the projection in January from $3.65 to $3.80.
–With assistance from Kiel Porter.
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