Bloomberg News

United Technologies Bid Said to Value Goodrich at $15.6 Billion

September 21, 2011

Sept. 21 (Bloomberg) -- United Technologies Corp.’s all- cash offer for Goodrich Corp. may value the aerospace supplier at more than $15.6 billion, with a bid exceeding $125 a share, said three people with knowledge of the discussions.

The companies’ boards will meet separately tonight and may announce a deal as soon as tomorrow, said the people, who declined to be identified because the matter is private. Talks could still break down and an agreement may not be reached.

United Technologies and Goodrich were discussing a price of $110 to $120 a share at the end of last week, one person said. At $125 a share, Goodrich would fetch 45 percent more than its closing share price on Sept. 15, the day before Bloomberg reported the companies were in talks.

A spokesman for Hartford, Connecticut-based United Technologies and spokesmen for Charlotte, North Carolina-based Goodrich didn’t immediately return phone calls and e-mails seeking comment.

Goodrich jumped 11 percent to $122 at 7:59 p.m. in extended trading, after closing at $109.49 on the New York Stock Exchange. United Technologies slid to $74 in late trading. It closed at $74.87 in the regular session.

Buying Goodrich would add the world’s largest maker of aircraft landing gear to an aerospace portfolio at United Technologies that includes Sikorsky helicopters, Pratt & Whitney jet engines and the Hamilton Sundstrand unit, whose products include aviation electronics.

Goodrich’s aerospace lineup includes nacelles, the casings that hold jet engines; electronics; and temperature-control systems.

‘Good Price’

“If United Technologies were able to acquire Goodrich for $125 a share, that would be a good price for both sides,” Robert Stallard, an RBC Capital Markets analyst in New York, said this week in a note to investors. He recommends buying the shares of both companies.

Goodrich’s market value was $13.7 billion as of the close of trading today, according to data compiled by Bloomberg, while United Technologies’ was $68 billion.

United Technologies had $5.4 billion in cash and near-cash items at the end of last quarter, and posted sales of $54.3 billion in 2010. Goodrich reported revenue of $6.97 billion last year.

Chief Executive Officer Louis Chenevert signaled his interest in having United Technologies pursue acquisitions when he named William Brown as senior vice president of corporate strategy in March. Brown completed more than 40 purchases as head of UTC Fire & Security.

Chenevert, 54, hasn’t made a large aerospace acquisition since becoming CEO in 2008. He ran the Pratt & Whitney unit before being promoted to chief operating officer and president of the parent company in 2006.

--With assistance from Rachel Layne in Boston. Editors: Jennifer Sondag, Ed Dufner

To contact the reporters on this story: Zachary R. Mider in New York at zmider1@bloomberg.net; Jeffrey McCracken in New York at jmccracken3@bloomberg.net; Susanna Ray in Seattle at sray7@bloomberg.net

To contact the editors responsible for this story: Jennifer Sondag at jsondag@bloomberg.net; Ed Dufner at edufner@bloomberg.net


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