FARMINGTON, Conn. and
CEDAR RAPIDS, Iowa, Sept. 4, 2017 /PRNewswire/ -- United
Technologies Corp. (NYSE: UTX) ("UTC") and Rockwell Collins, Inc.
(NYSE: COL) ("Rockwell Collins") today announced that they have
reached a definitive agreement under which United Technologies will
acquire Rockwell Collins for $140.00
per share, in cash and UTC stock.
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.
"This acquisition adds tremendous capabilities to our aerospace
businesses and strengthens our complementary offerings of
technologically advanced aerospace systems," said UTC Chairman and
Chief Executive Officer Greg Hayes.
"Together, Rockwell Collins and UTC Aerospace Systems will enhance
customer value in a rapidly evolving aerospace industry by making
aircraft more intelligent and more connected."
"The integrated companies' expertise in developing electrical,
mechanical and software solutions will allow us to deliver more
innovative products and services and provide greater value to our
customers and shareowners," Hayes continued. "This combination will
also create new opportunities for the talented employees of both
companies to advance innovation in a growing and dynamic industry.
Importantly, UTC and Rockwell Collins share cultures of
mutual trust and respect, accountability and teamwork that will
allow us to work together to achieve our common goals."
"We are extremely pleased to announce this compelling
transaction with UTC which is a testament to the value we have
created for Rockwell Collins' employees, customers and
shareowners," said Kelly Ortberg,
Chairman, President and Chief Executive Officer of Rockwell
Collins. "The combination will enable us to compete more
effectively for future business through continued investments in
innovation, world-class integrated product offerings and the
ability to retain the top talent in the industry. We look forward
to the next chapter in Rockwell Collins' long and proud history, as
part of UTC."
Under 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. 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 $23 billion and a total transaction value of
$30 billion, including Rockwell
Collins' net debt.
On a pro-forma 2017 basis, UTC is expected to have global sales
of approximately $67 to $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 $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.
"We have demonstrated we can successfully integrate large
acquisitions into our business and I have full confidence that the
team has the capability to do it again," Hayes said. "Once we have
completed the integration of Rockwell Collins and made progress
towards reducing leverage back to historical levels, we will have
an opportunity to explore a full range of strategic options for
UTC."
UTC today also reaffirmed its expectations for 2017 sales of
approximately $58.5 to $59.5 billion
and adjusted earnings in the range of $6.45
to $6.60 per share.*
*Note: When UTC provides an expectation for adjusted EPS on a
forward-looking basis, a reconciliation of the difference between
the non-GAAP expectation and the corresponding GAAP measure
generally is not available without unreasonable effort. See
"Use and Definitions of Non-GAAP Financial Measures" below for
additional information.
Advisors
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.
Conference call
United Technologies will hold a
conference call to discuss this announcement beginning at
8:00 a.m. ET Tuesday, September 5.
Participants should call (877) 280-7280 at least 15 minutes prior
to the scheduled start. The presentation will be webcast at
www.utc.com, and a recording will be archived on the website. A
slideshow accompanying the presentation will be posted to
www.utc.com prior to the call. A recording will be archived later
on the site and will be available for replay by phone from
12 p.m. ET Tuesday, September 5, to
midnight Monday, September 11. For a
replay, dial (404) 537-3406. At the prompt for a conference ID
number, enter 80965884.
About United Technologies
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.
About Rockwell Collins
Rockwell Collins is a leader in 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.
Cautionary Statement
This communication contains
statements which, to the extent they are not statements of
historical or present fact, constitute "forward-looking statements"
under the securities laws. From time to time, oral or written
forward-looking statements may also be included in other
information released to the public. These forward-looking
statements are intended to provide management's current
expectations or plans for our future operating and financial
performance, based on assumptions currently believed to be valid.
Forward-looking statements can be identified by the use of words
such as "believe," "expect," "expectations," "plans," "strategy,"
"prospects," "estimate," "project," "target," "anticipate," "will,"
"should," "see," "guidance," "confident" and other words of similar
meaning in connection with a discussion of future operating or
financial performance. Forward-looking statements may include,
among other things, statements relating to future sales, earnings,
cash flow, results of operations, uses of cash, share repurchases
and other measures of financial performance or potential future
plans, strategies or transactions of United Technologies or the
combined company following United Technologies' proposed
acquisition of Rockwell Collins, the anticipated benefits of the
proposed acquisition, including estimated synergies, the expected
timing of completion of the transaction and other statements that
are not historical facts. All forward-looking statements involve
risks, uncertainties and other factors that may cause actual
results to differ materially from those expressed or implied in the
forward-looking statements. For those statements, we claim the
protection of the safe harbor for forward-looking statements
contained in the U.S. Private Securities Litigation Reform Act of
1995. Such risks, uncertainties and other factors include, without
limitation: (1) the effect of economic conditions in the industries
and markets in which United Technologies and Rockwell Collins
operate in the U.S. and globally and any changes therein, including
financial market conditions, fluctuations in commodity prices,
interest rates and foreign currency exchange rates, levels of end
market demand in construction and in both the commercial and
defense segments of the aerospace industry, levels of air travel,
financial condition of commercial airlines, the impact of weather
conditions and natural disasters and the financial condition of our
customers and suppliers; (2) challenges in the development,
production, delivery, support, performance and realization of the
anticipated benefits of advanced technologies and new products and
services; (3) future levels of indebtedness and capital spending
and research and development spending; (4) future availability of
credit and factors that may affect such availability, including
credit market conditions and our capital structure; (5) the timing
and scope of future repurchases of United Technologies' common
stock, which may be suspended at any time due to market conditions
and the level of other investing activities and uses of cash,
including in connection with the proposed acquisition; (6) delays
and disruption in delivery of materials and services from
suppliers; (7) company and customer- directed cost reduction
efforts and restructuring costs and savings and other consequences
thereof; (8) the scope, nature, impact or timing of acquisition and
divestiture activity, including among other things integration of
acquired businesses, including Rockwell Collins, into United
Technologies' existing businesses and realization of synergies and
opportunities for growth and innovation; (9) new business or
investment opportunities; (10) our ability to realize the intended
benefits of organizational changes; (11) the anticipated benefits
of diversification and balance of operations across product lines,
regions and industries; (12) the outcome of legal proceedings,
investigations and other contingencies; (13) pension plan
assumptions and future contributions; (14) the impact of the
negotiation of collective bargaining agreements and labor disputes;
(15) the effect of changes in political conditions in the U.S. and
other countries in which United Technologies and Rockwell Collins
operate, including the effect of changes in U.S. trade policies or
the U.K.'s pending withdrawal from the EU, on general market
conditions, global trade policies and currency exchange rates in
the near term and beyond; (16) the effect of changes in tax,
environmental, regulatory (including among other things
import/export) and other laws and regulations in the U.S. and other
countries in which United Technologies and Rockwell Collins
operate; (17) the ability of the parties to receive the required
regulatory approvals (and the risk that such approvals may result
in the imposition of conditions that could adversely affect the
combined company or the expected benefits of the transaction) and
approval of Rockwell Collins' shareowners and to satisfy the other
conditions to the closing of the transaction on a timely basis or
at all; (18) the occurrence of events that may give rise to a right
of one or both of the parties to terminate the merger agreement;
(19) negative effects of the announcement or the consummation of
the transaction on the market price of United Technologies' and/or
Rockwell Collins' common stock and/or on their respective financial
performance; (20) risks relating to the value of the United
Technologies' shares to be issued in the transaction, significant
transaction costs and/or unknown liabilities; (21) the possibility
that the anticipated benefits from the proposed transaction cannot
be realized in full or at all or may take longer to realize than
expected, including risks associated with contracts containing
provisions that may be triggered by the proposed transaction; (22)
the possibility that costs or difficulties related to the
integration of Rockwell Collins' operations with those of United
Technologies will be greater than expected; and (23) the ability of
the combined company to retain and hire key personnel. There can be
no assurance that the proposed acquisition or any other transaction
described above will in fact be consummated in the manner described
or at all. For additional information on identifying factors
that may cause actual results to vary materially from those stated
in forward-looking statements, see the reports of United
Technologies and Rockwell Collins on Forms 10-K, 10-Q and 8-K filed
with or furnished to the SEC from time to time. Any forward-looking
statement speaks only as of the date on which it is made, and
United Technologies and Rockwell Collins assume no obligation to
update or revise such statement, whether as a result of new
information, future events or otherwise, except as required by
applicable law.
Use and Definitions of Non-GAAP Financial
Measures
United Technologies Corporation reports its
financial results in accordance with accounting principles
generally accepted in the United
States ("GAAP").
We supplement the reporting of our financial information
determined under GAAP with certain non-GAAP financial information.
The non-GAAP information presented provides investors with
additional useful information, but should not be considered in
isolation or as substitutes for the related GAAP measures.
Moreover, other companies may define non-GAAP measures differently,
which limits the usefulness of these measures for comparisons with
such other companies. We encourage investors to review our
financial statements and publicly-filed reports in their entirety
and not to rely on any single financial measure.
When we provide our expectation for adjusted earnings per share
("EPS") on a forward-looking basis, a reconciliation of the
difference between this non-GAAP expectation and the corresponding
GAAP measure (expected diluted EPS from continuing operations)
generally is not available without unreasonable effort due to
potentially high variability, complexity and low visibility as to
the items that would be excluded from the GAAP measure in the
relevant future period, such as unusual gains and losses, the
ultimate outcome of pending litigation, fluctuations in foreign
currency exchange rates, the impact and timing of potential
acquisitions and divestitures, and other structural changes or
their probable significance. The variability of the excluded items
may have a significant, and potentially unpredictable, impact on
our future GAAP results.
Additional Information
In connection with the proposed
transaction, United Technologies will file a registration statement
on Form S-4, which will include a document that serves as a
prospectus of United Technologies and a proxy statement of Rockwell
Collins (the "proxy statement/prospectus"), and each party will
file other documents regarding the proposed transaction with the
SEC. Investors and security holders are urged to read the proxy
statement/prospectus and other relevant documents filed with the
SEC when they become available, because THEY WILL CONTAIN IMPORTANT
INFORMATION. A definitive proxy statement/prospectus will be sent
to Rockwell Collins' shareowners. Investors and security holders
will be able to obtain the registration statement and the proxy
statement/prospectus free of charge from the SEC's website or from
United Technologies or Rockwell Collins. The documents filed by
United Technologies with the SEC may be obtained free of charge at
United Technologies' website at www.utc.com or at the SEC's website
at www.sec.gov. These documents may also be obtained free of charge
from United Technologies by requesting them by mail at UTC
Corporate Secretary, 10 Farm Springs Road, Farmington, CT, 06032, by telephone at
1-860-728-7870 or by email at corpsec@corphq.utc.com. The documents
filed by Rockwell Collins with the SEC may be obtained free of
charge at Rockwell Collins' website at www.rockwellcollins.com or
at the SEC's website at www.sec.gov. These documents may also be
obtained free of charge from Rockwell Collins by requesting them by
mail at Investor Relations, 400 Collins Road NE, Cedar Rapids, Iowa 52498, or by telephone at
1-319-295-7575.
Participants in the Solicitation
United Technologies
and Rockwell Collins and their respective directors and executive
officers and other members of management and employees may be
deemed to be participants in the solicitation of proxies in respect
of the proposed transaction. Information about United
Technologies' directors and executive officers is available in
United Technologies' proxy statement dated March 10, 2017, for its 2017 Annual Meeting of
Shareowners. Information about Rockwell Collins' directors and
executive officers is available in Rockwell Collins' proxy
statement dated December 14, 2016,
for its 2017 Annual Meeting of Shareowners and in Rockwell Collins'
Forms 8-K dated January 10, 2017 and
April 13, 2017. Other information
regarding the participants in the proxy solicitation and a
description of their direct and indirect interests, by security
holdings or otherwise, will be contained in the proxy
statement/prospectus and other relevant materials to be filed with
the SEC regarding the acquisition when they become available.
Investors should read the proxy statement/prospectus carefully when
it becomes available before making any voting or investment
decisions. You may obtain free copies of these documents from
United Technologies or Rockwell Collins as indicated above.
No Offer or Solicitation
This communication shall not
constitute an offer to sell or the solicitation of an offer to buy
any securities, nor shall there be any sale of securities in any
jurisdiction in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the
securities laws of any such jurisdiction. No offering of
securities shall be made except by means of a prospectus meeting
the requirements of Section 10 of the U.S. Securities Act of
1933, as amended.
Contacts
Media Inquiries, UTC
(860) 728-7907
Investor Relations, UTC
(860) 728-7608
#UTC-IR
View original
content:http://www.prnewswire.com/news-releases/united-technologies-to-acquire-rockwell-collins-for-30-billion-300513597.html
SOURCE United Technologies Corp.