United Technologies bids for Goodrich in all cash deal The record pile of cash many corporations are sitting on is the subject of fierce debate among economists, many of whom assert businesses' reticence to spend is contributing to - and in many ways prompted – the slowdown in the U.S. economy. One company, however, announced this week it would put its cash – and ample amounts of it – to good use.

United Technologies said this week it had reached an agreement to purchase Goodrich Corp. for $127.50 per share. Purchasing shares at that value equates to a total enterprise value of $18.4 billion, which includes $1.9 billion in net debt assumed, company executives affirmed.

Hartford, Connecticut-based United Technologies is responsible for the manufacturing of a number of high-technology products, such as Pratt & Whitney aircraft engines, Sikorsky helicopters and Carrier heating, air conditioning and refrigeration systems. Goodrich has a diversified portfolio of systems and services it supplies to aerospace and homeland security markets.

Government regulators must still lend their approval to the proposed buyout, as do Goodrich shareholders. When – and if – United Technologies' bid is approved, the company would have worldwide sales of roughly $66 billion, based on forecast 2011 results, analysts asserted.

United Technologies officials contend the acquisition will effectively enhance the company's market clout, and achieve significant business cost reductions in the long-term. What's more, by purchasing Goodrich, United Technologies said it would have a strengthened position within the exceedingly competitive and oligopolistic aerospace and defense sectors.

The company is paying a 16 percent premium to Goodrich's stock's closing price on Wednesday, according to The New York Times. Moreover, the price represents a 47 percent premium compared to Goodrich's shares' closing price on September 15, before whispers of an impending deal surfaced.

"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," United Technologies chairman Louis Chenevert said in a statement. "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."

Per terms of the deal, Goodrich would be absorbed into United Technologies' aerospace division. Goodrich chief executive Marshall Larsen would continue to run its operations.

Share To:

Strategic Sourceror

Post A Comment:

0 comments so far,add yours