;

UTC to Become Aerospace Pure Play With Plan to Split Into 3 Companies

The Climate, Controls & Security (CCS) unit will be renamed Carrier and spun off, as UTC explores divesting its fire and security business.

FARMINGTON, Conn. — United Technologies Corp. (NYSE: UTX) will spin off its Otis elevator division and Carrier building systems business to focus solely on aviation, led by jet engine maker Pratt & Whitney and newly acquired parts maker Rockwell Collins.

In announcing it plans Monday, the company said the Otis and Climate, Controls & Security (CCS) businesses will become independent companies, and CCS will be renamed Carrier. UTC continues to explore the divesture of its fire and security business, according to news reports.

Following the portfolio separation, UTC will operate as a leading aerospace company comprised of Collins Aerospace Systems and Pratt & Whitney businesses, according to the company.

The split will take place as a tax-free spinoff of the Otis and Carrier businesses to existing shareholders. The announcement arrived on the heels of UTC completing its $30 billion deal for Rockwell Collins, which received final regulatory approval from China last week.

In a conference call with investors Tuesday, UTC Chairman and CEO Greg Hayes said “the fire and security field business” within CCS generates “roughly $2.5 billion of sales,” while referencing it as a “roughly 10% margin kind of business.”

During the call, Hayes confirmed there is a process in place to divest the company’s fire and security business.

“The focuses of Carrier going forward is going to be on products and services, not on installation and field. And I think as we think about the portfolio, if we divest or choose to divest of the F&S field business, it will be really to give us a better focus going forward of the products and services portfolio,” he said.

UTC built its Fire & Security unit with purchases including Lenel Systems, an access control and software developer; Chubb, a fire safety and security services business; and Kidde, a British fire and safety company. In September, UTC reached an agreement to acquire S2 Security, a leading developer of unified security and video management solutions.

UTC said it expects splitting up the company will take 18 to 24 months.

About the Author

Contact:

Although Bosch’s name is quite familiar to those in the security industry, his previous experience has been in daily newspaper journalism. Prior to joining SECURITY SALES & INTEGRATION in 2006, he spent 15 years with the Los Angeles Times, where he performed a wide assortment of editorial responsibilities, including feature and metro department assignments as well as content producing for latimes.com. Bosch is a graduate of California State University, Fresno with a degree in Mass Communication & Journalism. In 2007, he successfully completed the National Burglar and Fire Alarm Association’s National Training School coursework to become a Certified Level I Alarm Technician.

Security Is Our Business, Too

For professionals who recommend, buy and install all types of electronic security equipment, a free subscription to Security Sales & Integration is like having a consultant on call. You’ll find an ideal balance of technology and business coverage, with installation tips and techniques for products and updates on how to add sales to your bottom line.

A free subscription to the #1 resource for the residential and commercial security industry will prove to be invaluable. Subscribe today!


Leave a Reply

Your email address will not be published. Required fields are marked *

Get Our Newsletters