Elliott Investment Management, the $8bn activist hedge fund firm founded by Paul Singer, has built a stake worth over $1bn in Johnson Controls International, a specialist in HVAC control systems used by data centres, according to a report by Bloomberg.
The report cites unnamed sources familiar with the matter in confirming that Elliott’s position makes it one of the top 10 investors in Johnson Controls, which has underperformed its main competitors over the past year.
While Johnson has seen a 9.2% uptick in its share price over the past year, giving it a market value of around $46.5bn, rival Carrier Global and Lennox International have seen their stocks appreciate more than 50% during the same period.
The three firms are all specialists in HVAC control systems, a booming sector thanks to the crucial role they play in data centre operations. Their equipment and systems are also used in semiconductor and electric vehicle manufacturing facilities.
Elliott’s intention towards the Ireland-incorporated business, which operates from its main offices in Milwaukee under then leadership of Chief Executive Officer George Oliver, is not known at this stage, although several of its recent investments have led to C-suite changes.
Sensata Technologies Holdings’s CEO departed last month after the company reported a cooperation agreement with Elliott, while the CEO of Crown Castle, which is facing a proxy battle against its founder, announced his retirement weeks before a settlement agreement with Elliott. NRG Energy’s president and CEO also departed from management and board positions after the company agreed a pact with Elliott.
