Carlyle Group, BC Partners team up for UTC’s Hamilton units
25 Jul 2012
Private equity firms Carlyle Group and BC Partners are in advanced joint talks to buy two units of Hamilton Sundstrand, subsidiary of United Technologies Corp (UTC), in a deal that could be valued at more than $3.5 billion, Reuters reported, citing three people familiar with the matter.
The private equity consortium has emerged as the leading bidders for Hamilton's pump and air compressor businesses of UTC's Hamilton Sundstrand aircraft components subsidiary, the report said.
While a deal is imminent, the sources cautioned that TPG Capital is also in the race after having entered the final round of bidding.
The report comes a day after UTC said it would sell its Pratt & Whitney Rocketdyne unit to GenCorp Inc, a maker of aerospace propulsion systems, for $550 million. (See: UTC to sell Pratt & Whitney Rocketdyne unit to GenCorp for $550 mn)
The sale is part of the Connecticut-based company's plan to sell certain assets in order to fund its September 2011 proposed acquisition of rival Goodrich Corp for $16.5-billion.
UTC, which also owns the Otis brand of elevators and escalators, had earlier said that it would to sell its Rocketdyne space unit, Clipper Windpower and pump and compressor-making units of Hamilton Sundstrand in order to fund the acquisition.
Hamilton Sundstrand's pump and compressor-making units comprises Milton Roy Company and Sundyne Corporation, which make fluid control products and pumps, and Sullair, one of the world's leading air compressor manufacturers.
Several industrial companies such as SPX Corp , Flowserve Corp, Dover Corp, Atlas Copco AB, and Gardner Denver had earlier shown interest in buying the units separately, but nearly all have since dropped out.
UTC, which received final bids in the last week of June, has been weighing whether to sell the units separately or both businesses to a single financial buyer, the sources told the news agency.
UTC, which reported net income of $4.711 billion in 2010 on revenues of $54.3 billion, is a US multinational conglomerate that manufactures high-technology products in many areas, including aircraft engines, helicopters, HVAC, fuel cells, elevators and escalators, fire and security, building systems, and industrial products, among others.
It is also a large military contractor, producing missile systems, aircraft engines and military helicopters, including Sikorsky helicopters and Pratt & Whitney jet engines.
Its aerospace businesses include Hamilton Sundstrand aerospace electric systems, Sikorsky Aircraft, its helicopter making unit and Pratt & Whitney, the jet engines unit.
UTC, which has a market capitalisation of $67 billion, also owns Otis elevators and Carrier heating and cooling.
