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UTC Buying Goodrich for $18.4B

Photonics Spectra
Oct 2011

HARTFORD, Conn., and CHARLOTTE, N.C. – United Technologies Corp. (UTC) plans to buy Goodrich Corp. for $18.4 billion in cash, or $127.50 per share; the company expects the acquisition to strengthen its position in the aerospace and defense industries.

Hartford-based UTC’s products include Pratt & Whitney aircraft engines; Sikorsky helicopters; Carrier heating, air conditioning and refrigeration systems; Hamilton Sundstrand aerospace systems and industrial products; Otis elevators and escalators; UTC Fire & Security systems; and UTC Power fuel cells.

Goodrich and its 27,000 employees worldwide serve the aerospace, defense and homeland security markets. Its estimated sales for 2011 are $8 billion. Sensors Unlimited Inc., a maker of indium gallium arsenide photodiodes, arrays and cameras for near-infrared and short-wave-infrared imaging applications, was acquired by Goodrich in 2005 and is part of Goodrich ISR Systems.

UTC expects the transaction, which includes assuming nearly $2 billion of Goodrich’s debt, to be accretive to earnings in the second year.

“Goodrich is a great business with a solid product portfolio and significant aftermarket sales that complement UTC’s existing aerospace presence,” said UTC chairman and CEO Louis Chenevert. “This acquisition further strengthens our position in the growing commercial aerospace market and enhances our ability to support our customers with more integrated systems.”

Under the deal, Marshall Larsen, now chairman, president and CEO of Goodrich, will become chairman and CEO of a combined UTC Aerospace Systems business unit. The senior leadership team of the combined companies will be located in Charlotte.

United Technologies expects to finance the transaction through a combination of debt and equity issuance. The closing is subject to customary closing conditions, including regulatory and Goodrich shareholder approval.

Following completion of the transaction, United Technologies is expected to have worldwide sales of approximately $66 billion, based on projected 2011 results, the company said. Hours after the deal was announced, New York law firm Bernstein Liebhard LLP said it is investigating whether the Goodrich board breached its fiduciary duty to its shareholders by agreeing to the acquisition.



GLOSSARY
carrier
An analog signal capable of being modulated as to frequency, amplitude or phase to carry information.
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