Chart Industries: $300 Million Roots Sale Checks Another Box for Howden Success

Chart Industries has agreed to sell its Roots business to Ingersoll Rand for $300 million. This is an excellent valuation, in our view, at a low teens EBITDA multiple. The business provides low-pressure compression and vacuum technologies, and its sale is a significant step toward achieving the planned $500 million in asset sales after completion of the Howden acquisition. We think Roots has fairly low growth prospects and can’t really be pivoted toward clean energy applications; we expect similar attributes associated with the remaining $200 million in asset sales. Given the small size of the transaction, we will maintain our $165 fair value estimate and narrow moat rating for Chart.