UTC has partaken in its fair share of acquisitions, from Goodrich under Louis Chenevert to Rockwell Collins. Here, we take a closer look.
United Technologies Corporation (UTC) has been around for 84 years, changing their name from United Aircraft Corporation in 1975 to reflect an expanded interest in more areas of high-tech industries. Based out of Farmington, Connecticut, they are one of the leaders in the aerospace industry. UTC also has their hands in other industries such as HVAC as well. They truly are a conglomerate that represents many industries. But their bread and butter is definitely in aerospace.
UTC made headlines again recently when they acquired Rockwell Collins Inc. for about $23 billion. They are essentially making themselves a one stop shop for anything aerospace. UTC is able to complete jetliners and military planes from tip to tail without having to involve another company to finish the job.
By acquiring Rockwell Collins, UTC is bringing two legendary companies in the aerospace industry together. Rockwell Collins has been around about as long as UTC. It was founded in 1933 with its headquarters in Cedar Rapid, Iowa. Rockwell Collins provided avionics and information technology systems and services to governmental agencies and aircraft manufacturers. Very little of what UTC and Rockwell Collins does will overlap, making the acquisition even better so they cover more areas of aerospace without being redundant.
The $23 billion deal is one of the largest in all of aviation history. It literally creates an aircraft manufacturer that is able to produce almost any aviation products. Airplanes, jet engines, and technology such as touchscreen displays and controls in the cockpit will continue to bring in a huge amount of business for UTC.
The acquisition of Rockwell Collins only comes about five years after UTC acquired another aerospace company, the Goodrich Corporation. UTC is definitely making major moves in the aerospace industry. The Goodrich acquisition was completed in 2012 and cost UTC about $18.5 billion.
This occurred when Louis Chenevert was President and CEO of UTC. He began his tenure in 2008 and six short years later, UTC share price had risen 79 percent from when he took charge. Louis Chenevert abruptly retired in 2014 to focus on his family and other interests, but he left a lasting legacy at UTC.
The Goodrich Corporation was an aerospace manufacturing company based out of Charlotte, North Carolina, that in the past was well known for their Goodrich tires. The company first started in 1870 and had become major players in the aerospace industry in the 1990s until they were acquired by UTC.
Louis Chenevert (who we’ve written about here) was always willing to take chances, especially when it meant broadening UTC’s impact in areas of technology. With Louis Chenevert at the helm, it paid back in spades. He developed a bit of a relationship with Goodrich leader Marshall Larsen and after a year of quiet negotiations, UTC made the announcement that they were acquiring Goodrich and keeping Larsen on board working further with UTC. Louis Chenevert was able to walk away and retire at the age of 54 with some very nice stock options and a great payout. This is something we all hope for when it comes to retiring. Being able to step away on our own terms is what we all strive for in business.
Other UTC Businesses
UTC is best known for operating in the aerospace industry. They have profitable contracts with the government as well as commercial deals that generate nice revenue. Plus, they are a major supplier for space programs. For more than half a century now, UTC has been present when mankind was exploring the universe. For every major mission, UTC was there researching and developing life support systems and enabling further space exploration.
Pratt & Whitney is a subsidiary of UTC and they are essentially a global aerospace manufacturer. They build aircraft engines that are used in both civil and military aviation. They do a lot of business for UTC and usually generate a revenue of close to $15 billion yearly. Headquartered in East Hartford, Connecticut, they are one of the top aero-engine manufacturers. Along with General Electric and Rolls-Royce, they round out the top three. Pratt & Whitney have over 30,000 employees and more than 11,000 customers. They are present in 180 countries across the globe as well.
UTC also owns the Otis Elevator Company. Louis Chenevert was interested in diversifying their portfolio to include other businesses. With Otis, they manufacture, install, and service elevators, escalators, and moving walkways. Otis employs more than 66,000 people worldwide. It is a company that has lasted 160 years and appears to be set to last another 160, unless there are those flying skateboard things in our near future like the ones from Back to the Future with Michael J. Fox.
UTC Climate, Controls, & Security offer a number of items and services. They create fire detection and suppression systems. They build access control systems and security alarm systems. They also provide monitoring services to further increase safety measures. Just like all of the other businesses owned by UTC, they seem to provide great numbers. It has yearly revenue just under $17 billion and the number of employees to be estimated at 55,000.
Carrier is a company owned by UTC and they are a global manufacturer in the HVAC arena based out of Jupiter, Florida. Heating, ventilation, air conditioning, and refrigeration systems are all supplied by Carrier. Being a global supplier definitely brings in quite a bit of business for UTC and Carrier. It is a nearly $13 billion company with over 43,000 employees worldwide. Carrier was acquired by UTC back in 1979 and has been growing ever since.
Finally, UTC has a Research Center that has an eye towards the future. They are a research facility that is constantly developing new technologies and processes. With the world becoming more automated by the day, the things they are creating could be revolutionary down the road.