United Technologies Corp. (NYSE: UTX) today announced it has reached agreement to purchase Goodrich Corporation (NYSE: GR) forÂ $127.50Â per share in cash. This equates to a total enterprise value of$18.4 billion, includingÂ $1.9 billionÂ in net debt assumed. United Technologies expects to finance the transaction through a combination of debt and equity issuance. Â The equity component is expected to approximate 25 percent of the total. Â The closing is subject to customary closing conditions, including regulatory and Goodrich shareholder approvals.
Following completion of the transaction, United Technologies is expected to have worldwide sales of approximatelyÂ $66 billionÂ based on projected 2011 results. The combined company’s increased scale, financial strength and complementary products will strengthen United Technologies’ position in the aerospace and defense industry.
Goodrich is a global supplier of systems and services to the aerospace and defense industry. Â Its products include aircraft landing gear, aircraft wheels and brakes. Â Goodrich, with estimated 2011 sales ofÂ $8 billion, serves a global customer base with 27,000 employees worldwide.
“Goodrich delivers on all of our acquisition criteria. It is strategic to our core, has great technology and people, and strengthens our position in growth markets,” said United Technologies Chairman and Chief Executive OfficerÂ Louis Chenevert. Â “We are very excited to bring the capabilities of two great companies together, making us more competitive and better able to provide value to both customers and shareholders.”
“We are extremely pleased to have an agreement with United Technologies that delivers immediate cash value to our shareholders at a premium that reflects the strength of our business,” saidÂ Marshall Larsen, Chairman, President and Chief Executive Officer of Goodrich. Â “Our combination with United Technologies is a testament to our employees and will enable us to shape the future of aerospace through continued innovation, increased global scale and the best talent in the industry. Â Importantly, United Technologies has a similar culture of mutual trust and respect, accountability and teamwork. Â Goodrich’s long and proud history will enter a new chapter as part of United Technologies.”
Goodrich is well positioned for future growth based on its increased content on leading new commercial and military aircraft.Â The company’s broad position across many platforms, combined with increased air-framer production rates, will drive sustainable long-term aftermarket growth.Â United Technologies expects the transaction will 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,” Chenevert said. Â “This acquisition further strengthens our position in the growing commercial aerospace market and enhances our ability to support our customers with more integrated systems.”
Larsen, now Chairman, President and Chief Executive Officer of Goodrich, will become Chairman and Chief Executive Officer of a combined UTC Aerospace Systems business unit. Â The senior leadership team of the combined business will be located inÂ Charlotte, N.C.
United Technologies today also reaffirmed its expectations for 2011 revenues of approximatelyÂ $58 billion, earnings per share in the range of$5.35 to $5.45, and cash flow from operations less capital expenditures equal to or in excess of net income attributable to common shareowners.
J.P. Morgan and Goldman, Sachs & Co. are acting as financial advisors to United Technologies. Â Wachtell, Lipton, Rosen & Katz is serving as legal advisor to United Technologies. Â Credit Suisse Securities (USA) LLC and Citi are acting as financial advisors andÂ Jones DayÂ is acting as legal advisor to Goodrich.
United Technologies will hold a conference call with financial analysts to discuss this announcement beginning atÂ 8:30 a.m. ET Thursday, Sept. 22. Analysts should call (866) 582-8907 in the U.S. or (707) 287-9365 internationally at least 15 minutes prior to the scheduled start. The presentation will be webcast atÂ www.utc.com, and a recording will be archived on the website. A slideshow accompanying the presentation will be posted toÂ www.utc.com prior to the call. Â For a replay, dial (855) 859-2056 in the U.S. or (404) 537-3406 internationally.Â At the prompt for a conference ID number, enter 12882625.
United Technologies Corp., based inÂ Hartford, Connecticut, is a diversified company providing high technology products and services to the global aerospace and building industries. 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 Corporation, a Fortune 500 company, is a global supplier of systems and services to aerospace, defense and homeland security markets. With one of the most strategically diversified portfolios of products in the industry, Goodrich serves a global customer base with significant worldwide manufacturing and service facilities. For more information, visitÂ www.goodrich.com.
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