The activist investor Nelson Peltz is joining the board of Ingersoll-Rand, heading off a potential proxy fight.
Mr. Peltz disclosed in May that his fund, Trian Fund Management, had acquired a 7.05 percent stake in the manufacturing conglomerate, saying its shares were “currently undervalued in the marketplace and represent an attractive investment opportunity.†Trian said at the time that it wanted to discuss with senior management a restructuring of Ingersoll-Rand's key business units.
Mr. Peltz has been an advocate of corporate splits to try to unlock value, most famously in 2008, when he pushed Cadbury Schweppes to spin off its beverage businesses.
Ingersoll-Rand, whose manufactured brands include Thermo King, Kryptonite locks and Club Car golf carts, has looked to be a tempting target for a breakup. (For an undervalued conglomerate, Ingersoll-Rand is doing fairly well so far this year: its stock price is up nearly 48 percent year to date. )
In June, Trian disclosed that it had turned down an offer of a board seat.
But on Monday, Mike Lamach, Ingersoll-Rand's chief executive, said: “Following discussions with Trian Partners over the past few months, we have concluded that Nelson would be a valuable addition to Ingersoll-Rand's board. We welcome his perspective and ideas as we work towards our shared goal of enhancing value for our shareholders.â€
Mr. Peltz will also join the corporate governance and nominating committee and the finance committee of the board, which will expand to 12 directors.
“I look forward to working closely and constructively with the board and management as Ingersoll-Rand evaluates strategic opportunities to drive growth and shareholder value, including proposals presented by Trian Partners and other alternatives identified by the board,†Mr. Peltz said.
