UTC reports progress on divestitures - The Deal Pipeline (SAMPLE CONTENT: NEED AN ID?)
Subscriber Content Preview | Request a free trialSearch  
  Go

Industrials

Print  |  Share  |  Reprint

UTC reports progress on divestitures

by Lou Whiteman  |  Published April 24, 2012 at 3:32 PM
united-technologies-corp.jpgUnited Technologies Corp. said Tuesday, April 24, it is in final negotiations to sell its Rocketdyne unit and is making steady progress in other divestitures ahead of its planned $16.5 billion purchase of Goodrich Corp., set to close this summer.

Hartford, Conn.-based UTC said in March it would seek buyers for about $3 billion worth of assets in hopes of limiting the equity and debt issuance needed to complete its cash deal for Goodrich. In addition to retaining Deutsche Bank AG and Moelis & Co. to sell Rocketdyne, a maker of rocket engines and other space components, the conglomerate also hired Goldman Sachs Group Inc. to sell pump assets of its Hamilton Sundstrand unit and its Clipper Wind energy arm.

UTC chief financial officer Greg Hayes said Tuesday that the company expects to have a contract signed to sell Rocketdyne by the end of the second quarter, and said initial bids for the Hamilton Sundstrand assets came in "a little better than expected."

The comments came as UTC reported first-quarter earnings of $1.26 billion, topping analyst estimates. The conglomerate in buying Goodrich is seeking to boost its exposure to the commercial aerospace business ahead of an expected uptick in new, more fuel-efficient aircraft, while shedding slower-growth businesses.

The positive comments on the Hamilton Sundstrand auction are particularly significant, since those assets are expected to make up as much as two-thirds of the total amount raised through divestiture. Analysts had expected a robust auction for the business. However, a March deal between Tyco International Ltd. and Pentair Inc. to merge their flow control businesses could prevent two companies seen as potential buyers for the UTC assets from bidding.

Other potential acquirers for the assets still remain, including private equity firms and strategics such as Flowserve Corp. and SPX Corp.
Share:
Tags: Deutsche Bank AG | Flowserve Corp. | Goldman Sachs Group Inc. | Goodrich Corp. | Moelis & Co. | Pentair Inc. | SPX Corp. | Tyco International Ltd. | United Technologies Corp.

Free preview

This is only a preview of The Deal's sophisticated coverage. Explore the real-time intelligence as researched and reported on by our team of financial journalists with a license to The Deal Pipeline. Click here for more information.

Meet the journalists

Lou Whiteman

Senior Writer: Transportation

Contact



Movers & Shakers

Launch Movers and shakers slideshow

Ken deRegt will retire as head of fixed income at Morgan Stanley and be replaced by Michael Heaney and Robert Rooney. For other updates launch today's Movers & shakers slideshow.

Video

Coming back for more

Apax Partners offers $1.1 billion for Rue21, the same teenage fashion chain it took public in 2009. More video

Sectors