Edgar Filing: TRANE INC.

425

Filed by Ingersoll-Rand Company Limited.

Pursuant to Rule 425 under the Securities Act of 1933

and deemed filed pursuant to Rule 14a-12 under

the Securities Exchange Act of 1934

Subject Company: Trane Inc.

Commission File No.: 1-11415

This filing contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements relating to anticipated financial and operating results, the companies’ plans, objectives, expectations and intentions and other statements including words such as “anticipate,” “believe,” “plan,” “estimate,” “expect,” “intend,” “will,” “should,” “may,” and other similar expressions. Such statements are based upon the current beliefs and expectations of the management of Ingersoll-Rand Company Limited (“IR”) and Trane Inc. (“Trane”) and involve a number of significant risks and uncertainties. Actual results may differ materially from the results anticipated in these forward-looking statements. The following factors, among others, could cause or contribute to such material differences: failure to satisfy any of the conditions of closing, including the failure to obtain Trane stockholder approval; the risks that IR’s and Trane’s businesses will not be integrated successfully; the risk that IR and Trane will not realize estimated cost savings and synergies; costs relating to the proposed transaction; disruption from the transaction making it more difficult to maintain relationships with customers, employees, distributors or suppliers; the level of end market activity in IR’s and Trane’s commercial and residential market; weather conditions that could negatively or positively affect business and results of operations; additional developments which may occur that could affect the IR’s or Trane’s estimate of asbestos liabilities and recoveries; unpredictable difficulties or delays in the development of new product technology; fluctuations in pricing of our products, the competitive environment and related market conditions; changes in law or different interpretations of laws that may affect Trane’s or IR’s expected effective tax rate; increased regulation and related litigation; access to capital; and actions of domestic and foreign governments. Additional factors that could cause IR’s and Trane’s results to differ materially from those described in the forward-looking statements can be found in the 2006 Annual Report on Form 10-K of IR and the 2006 Annual Report on Form 10-K of Trane filed with the Securities and Exchange Commission (the “SEC”) and available at the SEC’s Internet site (http://www.sec.gov). Neither IR nor Trane undertakes any obligation to update any forward-looking statements to reflect circumstances or events that occur after the date on which such statements were made.

This communication is being made in respect of the proposed merger transaction involving IR, Trane and Indian Merger Sub, Inc. In connection with the proposed transaction, IR will file with the SEC a registration statement on Form S-4 and Trane will mail a proxy statement/prospectus to its stockholders, and each will be filing other documents regarding the proposed transaction with the SEC as well. BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, INVESTORS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS REGARDING THE PROPOSED TRANSACTION AND ANY OTHER RELEVANT DOCUMENTS CAREFULLY IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. The final proxy statement/prospectus will be mailed to Trane’s stockholders. Stockholders will be able to obtain a free copy of the proxy statement/prospectus, as well as other filings containing information about IR and Trane, without charge, at the SEC’s Internet site (http://www.sec.gov). Copies of the proxy statement/prospectus and the filings with the SEC that will be incorporated by reference in the proxy statement/prospectus can also be obtained, without charge, by directing a request to Ingersoll-Rand Company Limited, P.O. Box 0445, 155 Chestnut Ridge Road, Montvale, NJ 07645 Attention: Investor Relations, (201) 573-0123, or to Trane Inc., One Centennial Avenue, Piscataway, NJ 08855 Attention: Investor Relations, (732) 980-6125.

IR, Trane and their respective directors and executive officers and other persons may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction. Information regarding IR’s directors and executive officers is available in IR’s proxy statement for its 2007 annual meeting of stockholders and IR’s 2006 Annual Report on Form 10-K, which were filed with the SEC on April 23, 2007 and March 1, 2007, respectively, and information regarding Trane’s directors and executive officers is available in Trane’s proxy statement for its 2007 annual meeting of stockholders and Trane’s 2006 Annual Report on Form 10-K, which were filed with the SEC on March 23, 2007 and February 26, 2007, respectively. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the proxy statement/prospectus and other relevant materials to be filed with the SEC when they become available.

The following is a letter and related materials sent to IR employees.

***

To Ingersoll Rand Employees:

Today we announced an exciting move for our company, one that represents a major milestone in our company’s transformation. We signed an agreement to acquire Piscataway, NJ-based Trane, a leading global supplier of energy-efficient heating, ventilating and air conditioning systems and advanced building controls for commercial and residential markets. The press release announcing this transaction can be found here.

This transaction solidifies Ingersoll Rand’s status as a premier global diversified industrial company with leading positions in climate control, industrial and security markets. The combined businesses will have revenues of approximately $17 billion, with approximately $11 billion of our total revenues deriving from global climate control markets.

Bringing together our company with Trane meets our objective of adding less-cyclical businesses to our portfolio with strong brands, strong global growth prospects and sizable recurring revenues. Trane’s strong businesses in commercial and residential climate control complements our own highly regarded Hussmann and Thermo King businesses, and gives us a leading global position with a portfolio of premium brands.

At the same time, we improve our ability to deliver enhanced long-term value for Ingersoll Rand customers through expanded and comprehensive climate control solutions. Together, with Trane, we can work more strategically with all of our customers, broadening our product and service offerings for them through our complementary solutions.

Let me provide you with a few examples of our opportunities as a combined company. Trane currently uses third parties to service its light commercial products. We believe this represents an opportunity for our existing climate control service organization to capture that sizable recurring revenue stream. In addition, with Trane’s capabilities we are better positioned to provide technologies, products and services throughout the cold chain. Specifically, we will participate in all of the activities and processes necessary to preserve foods and perishables from their point of origin through their point of consumption or use. Also, we offer Trane an expanded global manufacturing footprint. While this obviously will benefit Trane, it also enables our organization to take on production in existing facilities where appropriate.

Seven years ago, we recognized the need for sweeping change in our company’s business model and undertook our transformation. From the beginning, our priorities have included decreasing the cyclicality of our business portfolio and pursuing profitable growth, while becoming more global, more customer-centric and more innovative. The Trane acquisition substantially advances our progress in all of these areas.

Following the completion of closing conditions, including regulatory reviews and approval by Trane shareholders, we expect to complete this transaction toward the end of the first quarter or the beginning of the second quarter of 2008. In the meantime, Ingersoll Rand and Trane will remain separate companies, with separate management and customers.

Prospectively, our plan is to operate Trane’s Commercial and Residential businesses as two separate businesses, reporting directly to me. Of course, under the Dual Citizenship model, these businesses will interact with the Climate Control Technologies Sector to leverage knowledge, intellectual property, best practices, and resources for the businesses’ mutual benefit. Also, we expect to maintain our current approach of operating multi-site corporate and shared service locations, which will include the addition of comparable Trane facilities.

Clearly, this is an exciting day for Ingersoll Rand employees, customers, shareholders and our other stakeholders. We will provide more information as we make progress with the integration process. In the meantime, thank you for your continued hard work and support which has helped to make this possible.

Sincerely yours,

Herb Henkel

Note: Because the transaction is subject to a vote of Trane stockholders and requires registration of the shares of Ingersoll Rand to be issued in the transaction, our written communications regarding the transaction may be deemed to be solicitations of proxies or an offering prospectus. As a result, the following information (legends) needs to be included in our communications to satisfy legal requirements.

Editor’s note: Herb Henkel will host a special webcast via the Internet today at 4:00 p.m., Eastern U.S. time, to discuss today’s announcement. Because of the need to prevent potential disruptions to other web- or Internet-related business applications, we only can accommodate a limited number of connections to the webcast at any given time. As a result, we are asking our locations to reserve meeting spaces where a sizable number of employees can view and listen to the webcast together. In addition, large meeting spaces should have the ability to amplify the audio feed from the presenting computer.

Details for the webcast will be available later today and sent via a Special IRDN.

***

The Next Chapter in Our Success Story

Next Chapter of Success

This filing contains “forward-looking statements”

within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but

are

not

limited

to,

statements

relating

anticipated

financial

and

operating

results,

the

companies’

plans,

objectives,

expectations

and

intentions

and

other

statements

including

words

such

“anticipate,”

“believe,”

“plan,”

“estimate,”

“expect,”

“intend,”

“will,”

“should,”

“may,”

and

other

similar

expressions.

Such

statements are based upon the current beliefs and expectations of the management of Ingersoll-Rand Company Limited (“IR”) and Trane Inc. (“Trane”) and

involve

number

significant

risks

and

uncertainties.

Actual

results

may

differ

materially

from

the

results

anticipated

these

forward-looking

statements.

The following factors, among others, could cause or contribute to such material differences: failure to satisfy any of the conditions of closing, including the

failure

obtain

Trane

stockholder

approval;

the

risks

that

IR’s

and

Trane’s

businesses

will

not

integrated

successfully;

the

risk

that

and

Trane

will

not realize

estimated

cost

savings

and

synergies;

costs

relating

the

proposed transaction;

disruption

from

the

transaction

making

it more

difficult

maintain

relationships

with

customers,

employees,

distributors

suppliers;

the

level

end

market

activity

IR’s

and

Trane’s

commercial and

residential

market; weather conditions that could negatively or positively affect business and results of operations; additional developments which may

occur

that

could

affect

the

IR’s

Trane’s

estimate

asbestos

liabilities

and

recoveries;

unpredictable

difficulties

delays

the

development

new

product technology; fluctuations in pricing of our products, the

competitive environment and related market conditions; changes in law or different

interpretations of laws that may affect Trane's or IR's

expected effective tax rate; increased regulation and related litigation; access to capital; and actions of

domestic

and

foreign

governments.

Additional

factors

that

could

cause

IR’s

and

Trane’s

results

differ

materially

from

those

described

the

forward-

looking statements can be found in the 2006 Annual Report on Form 10-K of IR and the 2006 Annual Report on Form 10-K of Trane filed with the Securities

and Exchange Commission (the “SEC”) and available at the SEC’s Internet site (http://www.sec.gov). Neither IR nor Trane undertakes any obligation to

update any forward-looking

statements

reflect

circumstances

events

that

occur

after

the

date

which

such

statements

were

made.

This communication is being made in respect of the proposed merger transaction involving IR, Trane and Indian Merger Sub, Inc. In connection with the

proposed transaction, IR will file with the SEC a registration statement on Form S-4 and Trane will mail a proxy statement/prospectus to its stockholders,

and each will be filing other documents regarding the proposed transaction with the SEC as well. BEFORE MAKING ANY VOTING OR INVESTMENT

DECISION, INVESTORS ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS REGARDING THE PROPOSED TRANSACTION AND ANY

OTHER RELEVANT DOCUMENTS CAREFULLY IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN

IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION. The final

proxy statement/prospectus will be mailed to Trane’s stockholders.

Stockholders will be able to obtain a free copy of the proxy statement/prospectus, as well as other filings containing information about IR and Trane, without

charge, at the SEC’s Internet site (http://www.sec.gov). Copies of the proxy statement/prospectus and the filings with the SEC that will be incorporated by

reference in the proxy statement/prospectus can also be obtained, without charge, by directing a request to Ingersoll-Rand Company Limited, P.O. Box

0445, 155 Chestnut Ridge Road, Montvale, NJ 07645 Attention: Investor Relations, (201) 573-0123, or to Trane Inc., One Centennial Avenue, Piscataway,

NJ 08855 Attention: Investor Relations, (732) 980-6125.

IR, Trane and their respective directors and executive officers and other persons may be deemed to be participants in the solicitation of proxies in respect of

the proposed transaction. Information regarding IR’s

directors and executive officers is available in IR’s

proxy statement for its 2007 annual meeting of

stockholders and IR’s

2006 Annual Report on Form 10-K, which were filed with the SEC on April 23, 2007 and March 1, 2007, respectively, and information

regarding Trane’s directors and executive officers is available in Trane’s proxy statement for its 2007 annual meeting of stockholders and Trane’s 2006

Annual Report on Form 10-K, which were filed with the SEC on March 23, 2007 and February 26, 2007, respectively. Other information regarding the

participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the proxy

statement/prospectus and other relevant materials to be filed with the SEC when they become available.

***

Next Chapter of Success

Agenda

•

Discuss today’s news

•

Introduce Trane

•

Explore the strategic value of the combined company

•

Questions and answers

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Combining two great

companies to create

a premier global

diversified industrial

company!

Continuing our journeys…. together

Next Chapter of Success

The transaction

•

Effective early 2008, pending shareholder approval and

government clearances

•

All worldwide assets

•

All worldwide operations

•

Commercial and Residential businesses

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Introduction to Trane

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Trane overview

$7.4F Billion 2007 Sales

Sales by

Geography

International

24%

North America

76%

Commercial

Completes

43%

Commercial

Controls, Parts

& Services

43%

Residential

28%

•

Founded 1864, headquartered in

New Jersey

•

Concluded separation plan:

–

WABCO spin-off, Aug. ‘07

–

Sale of Bath & Kitchen, Nov. ‘07

•

Leading global HVAC manufacturer

for commercial & residential markets

•

Products include large commercial

chillers, HVAC building systems, and

residential A/C units

•

Broad customer base

•

Premier brands: Trane, American

Standard

•

29,000 employees, 29 manufacturing

locations worldwide

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•

Air conditioners

•

Air cleaners

•

Heat pumps

•

Furnaces

•

Thermostats

•

Humidifiers

•

Boilers

Trane Residential

Next Chapter of Success

•

HVAC systems

•

Building controls

•

Building services

Trane Commercial

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Trane highlights

•

Large-scale, global business with 2007E revenue of $7.4 billion and EBITDA of

$815 million

•

#1 or #2 HVAC positions globally with pre-eminent brands

•

Industry-leading distribution with global footprint creates competitive advantage

•

Strong organic sales growth and consistent operating margins through the

cycle

•

Compelling growth and margin outlook

–

Attractive long-term end market fundamentals driven by replacement

demand and accelerating service/recurring revenue opportunity

–

Positive industry dynamics, such as energy conservation and ever-

growing installed base, support growth outlook

–

End market diversity provides long term stability

•

Leading

position

North

America

with

substantial

international

growth

opportunity

•

Trane will benefit from Ingersoll Rand’s international presence and

established distribution network

•

Limited exposure to U.S. new residential construction (approx. 5-7% of total sales)

Industry

Leading

Position

Strong

Historical and

Future Growth

Profile

International

Opportunities

Limited

Exposure to

Housing

Estimated debt and cash of $1,055mm and $900mm, respectively, as of December 31, 2007.

Next Chapter of Success

Trane’s Leading Products and Distribution

Source:

Trane Management and public filings

Residential Products

Commercial Products

Leading

Global

Sales

and

Distribution

Network

Over 100 countries

500+ company owned

sales, service and

distribution locations

Strong independent

commercial and residential

distribution

23,000+ associates /

dealers

3,300+ sales engineers

4,300+ service technicians

Proprietary

Distribution

Network

Enhances

Our

Global

Footprint

Next Chapter of Success

The combined company

•

$17 billion in projected annual revenues; $11+ billion

revenues in the global climate control market

•

Expanded product and service offerings for climate control

markets

•

Increased scale and global presence

•

Enhanced innovation and new product development

capabilities

•

Stronger competitive position in our markets

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A strong strategic fit

A leading climate control business for the 21

century

•

Shared industry expertise

•

Commitment to leadership in climate control markets

•

Complementary products and services with no overlap

•

Both market leaders in respective core products

•

Similar heritage of innovation and success

•

Prepared to meet the growing global demand for climate

control solutions

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Complementary products and services

•

Air conditioning systems and services

•

Building controls

•

Commercial and residential HVAC

•

Truck, trailer and sea container refrigeration equipment

•

Refrigerated retail displays and stationary refrigeration

•

Bus and rail HVAC

Next Chapter of Success

World-Leading Climate Control Business

•

Technology & services platform for delivering climate control solutions across

spectrum of high-value mobile & stationary applications worldwide

•

Broadening climate control solutions for the world we live in today

–

Enhancing

life,

air

quality

food

safety…

significantly

beyond

comfort

preservation

–

Multiple “Cold Chain”

opportunities, especially in emerging markets

•

Leveraging Climate Control platform

–

Service capability

–

Engineering and technology

–

Manufacturing and sourcing

#1 US

#2 Worldwide

Commercial HVAC

Equipment

#1 North America

remote display

cases

#1 North America

service provider

#1 Worldwide

transport

refrigeration

Market Leader in Climate Control

Next Chapter of Success

•

All of the activities and processes necessary to

preserve foods and perishables from their point of

origin through their point of consumption or use.

Cold Chain

Food

Harvest

Vending &

Logistics Mgmt

End-Use

Food Service

End-Use

Retail

Large

Warehousing

Food

Processing

Transport

Next Chapter of Success

Expanding customer value

•

Broader line of products and services

–

End-to-end solutions across the cold chain

•

Expanded global presence

–

Positioned to participate in emerging-market growth

•

Enhanced service network

–

Immediate opportunities in light-commercial services

•

Broader technology base to drive innovation

–

Climate quality, energy efficiency, alternative refrigerants

Next Chapter of Success

Ingersoll Rand’s business structure today

Climate Control

Technologies

Industrial

Technologies

Security

Technologies

Club Car

(Golf Cars

And Utility Vehicles)

Hussmann

(Stationary

Refrigeration)

Thermo

King

(Transport

Refrigeration)

Ingersoll Rand

(Air Solutions, Tools,

Energy Systems and

Material Handling)

Sectors

Primary

Brands &

Businesses

Multiple

Brands

(Exit

Devices, Door

Closers, Biometric

Access Control,

Integrated Systems)

Schlage

(Mechanical

And Electronic Locks)

Next Chapter of Success

The new Ingersoll Rand

Climate Control

Technologies

Industrial

Technologies

Security

Technologies

Trane

Residential

Trane

Commercial

~$11 Billion

~$3 Billion

*2008 Pro Forma

Next Chapter of Success

Powerful market leading brands

#1 N. America

lock and door

hardware

#1 Worldwide

golf cars

#1 N. America

retail display

cases

#1 N. American

service provider

#1 Worldwide

transport

refrigeration

#1 N. America

air compressors,

air tools

#1 US

#2 Worldwide

Commercial HVAC

Equipment

#1 or #2 in Major Markets

Next Chapter of Success

What to expect

•

Operate Commercial and Residential businesses as

separate units within Ingersoll Rand

•

Run corporate and shared service functions consistent with

Ingersoll Rand’s multi-site approach

•

Identify cross-selling and service revenue synergies

•

Identify material, supplier, procurement, manufacturing and

administrative efficiencies

•

Communicate frequently using multiple channels and

methods

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What’s next?

•

Shareholder approval

•

Government reviews

•

Transition period

•

Joint integration teams

Creating a

premier global organization!