United Technologies Corp. (NYSE: UTX) and Rockwell Collins, Inc. (NYSE: COL) has announced that they have reached a definitive agreement under which United Technologies will acquire Rockwell Collins for USD 140.00 per share, in cash and UTC stock, the company said.
Rockwell Collins is a provider of aviation and high-integrity solutions for commercial and military customers and is globally recognized for its-edge avionics, flight controls, aircraft interior and data connectivity solutions. On a 2017 pro forma basis, its estimated sales are greater than USD 8 billion.
Under the terms of the agreement, each Rockwell Collins shareowner will receive USD 93.33 per share in cash and USD 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 USD 115.69.
UTC 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.
The purchase price implies a total equity value of USD 23 billion and a total transaction value of USD 30 billion, including Rockwell Collins´ net debt.
On a pro-forma 2017 basis, UTC is expected to have global sales of approximately USD 67 to USD 68 billion following the transaction, based on estimated results.
UTC expects the combination will be accretive to adjusted earnings per share after the first full year following closing and generate an estimated USD 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. Kelly Ortberg will assume the role of Chief Executive Officer with Dave Gitlin serving as President and Chief Operating Officer.
Morgan Stanley & Co. LLC is acting as financial advisor to United Technologies. Wachtell, Lipton, Rosen & Katz is serving as legal advisor to United Technologies. J.P. Morgan Securities LLC and Citigroup Global Markets Inc. are acting as financial advisors and Skadden, Arps, Slate, Meagher & Flom is serving as legal advisor to Rockwell Collins.
United Technologies Corp., based in Farmington, Connecticut, provides high technology products and services to the building and aerospace industries. By combining a passion for science with precision engineering, the company is creating smart, sustainable solutions the world needs.
Rockwell Collins is a provider of aviation and high-integrity solutions for commercial and military customers around the world. Every day we help pilots safely and reliably navigate to the far corners of the earth; keep warfighters aware and informed in battle; deliver millions of messages for airlines and airports; and help passengers stay connected and comfortable throughout their journey. As experts in flight deck avionics, cabin electronics, cabin interiors, information management, mission communications, and simulation and training, we offer a comprehensive portfolio of products and services that can transform our customers´ futures.