Ingersoll-Rand sees $400 mln for 2006 M&A

NEW YORK (Reuters) - Diversified conglomerate Ingersoll-Rand Ltd. (IR.N: Quote, Profile, Research, Stock Buzz) expects to spend about $400 million on acquisitions in 2006 based on its current pipeline of deals, instead of its initial estimate of $600 million, Chief Executive Herbert Henkel said on Monday.

Henkel, speaking at the Reuters Manufacturing and Transportation Summit, said the company had been priced out of deals by private equity players using leverage to make such deals cost effective for them.

"Last year we did about $600 million in acquisitions. This year we are looking for about $400 million in acquisitions," Henkel said. Most of the acquisitions in 2005 were under $50 million, he said, and would likely remain in that range.

As a result, he said, the company has increased its capital spending and dividend payout.

It has built the capability to produce certain products rather than buying companies that make them, he said, citing a decision to build a factory to make fire doors rather than acquire a fire door company whose valuation was too high.

Most of the company's acquisitions in 2006 will be outside the United States, similar to 2005 when 14 out of its 16 purchases were in Europe, Turkey, India and China and other areas, he said.