United Technologies sees industrial units sale in Q3
By Soyoung Kim and Scott Malone
NEW YORK/BOSTON (Reuters) - United Technologies Corp (UTX.N: Quote) expects to receive second-round bids for its industrial units that make pumps and compressors by the end of June, and could announce a deal in the third quarter, the company's chief financial officer said on Thursday.
Greg Hayes, speaking at an investor meeting in Chicago, said the auction process remains "robust" with "lots of interest" from private equity buyers, but also from other industrial companies.
The diversified conglomerate is selling the industrial businesses of its Hamilton Sundstrand unit in an effort to fund its $16.5 billion takeover of aircraft components maker Goodrich Corp GR.N. People familiar with the matter have said these units combined could be valued at more than $3.5 billion.
"Some of the strategics are having a little bit more difficulty with their own stock price down but these are great properties and I think with the cost of capital where it is today, it's a pretty compelling case for somebody that has a strategic fit that these businesses really are worth the price," Hayes said.
Private equity firms TPG Capital TPG.UL, Carlyle Group (CG.O: Quote) and BC Partners remain involved in the process and are considering buying both pump and compressor businesses, people familiar with the matter said this week.
Other bidders are evaluating offers for either pumps or compressors only, the people said.
Dover Corp (DOV.N: Quote) and Atlas Copco (ATCOa.ST: Quote) are interested in buying the pump business, while Gardner Denver Inc (GDI.N: Quote), Onex Corp OCX.TO and Advent International among others have been pursuing compressors, they said.
Flowserve Corp (FLS.N: Quote) and SPX Corp SPW.N also expressed interest in buying the pump business, according to the people familiar with the matter, but two of the people said these companies' interest has cooled in recent weeks. Continued...