United Technologies To Buy Rockwell Collins In $30 Bln Deal

(RTTNews) - United Technologies Corp. (UTX) said Monday that it agreed to buy Rockwell Collins Inc. (COL) for $140.00 per share, in cash and UTC stock. The purchase price implies a total equity value of $23 billion and a total transaction value of $30 billion, including Rockwell Collins' net debt.

Rockwell Collins is a leader in aviation and high-integrity solutions for commercial and military customers and is globally recognized for its leading-edge avionics, flight controls, aircraft interior and data connectivity solutions. On a 2017 pro forma basis, its estimated sales are greater than $8 billion.

As per the terms of the agreement, each Rockwell Collins shareowner will receive $93.33 per share in cash and $46.67 in shares of UTC common stock, subject to a 7.5 percent collar centered on UTC's August 22, 2017 closing share price of $115.69.

United Technologies expects to fund the cash portion of the transaction consideration through debt issuances and cash on hand, and the company is committed to taking actions to maintain strong investment grade credit ratings.

The transaction is projected to close by the third quarter of 2018, subject to approval by Rockwell Collins' shareowners, as well as other customary closing conditions, including the receipt of required regulatory approvals.

On a pro-forma 2017 basis, United Technologies is expected to have global sales of approximately $67 billion to $68 billion following the transaction, based on estimated results.

United Technologies expects the combination will be accretive to adjusted earnings per share after the first full year following closing and generate an estimated $500+ million of run-rate pre-tax cost synergies by year four.

Upon completion of the transaction, Rockwell Collins and UTC Aerospace Systems will be integrated to create a new business unit named Collins Aerospace Systems. the Chairman, President and Chief Executive Officer of Rockwell Collins Kelly Ortberg will assume the role of Chief Executive Officer with Dave Gitlin serving as President and Chief Operating Officer.

United Technologies also reaffirmed its expectations for 2017 sales of approximately $58.5 billion to $59.5 billion and adjusted earnings in the range of $6.45 to $6.60 per share. Analysts polled by Thomson Reuters expect the company to report earnings of $6.58 per share and revenues of $59.42 billion for 2017. Analysts' estimates typically exclude special items.