Aerospace manufacturer Goodrich Corp’s shareholders have overwhelmingly approved United Technologies Corp’s roughly US$16.5bn takeover plan.
More than 98% of votes were cast on 13 March in favour of the transaction, which has a total enterprise…
Aerospace manufacturer Goodrich Corp’s shareholders have overwhelmingly approved United Technologies Corp’s roughly US$16.5bn takeover plan.
More than 98% of votes were cast on 13 March in favour of the transaction, which has a total enterprise value of US$18.4bn, including US$1.9bn of debt. Those votes represented around 75% of all outstanding shares of Goodrich’s common stock as of 6 February.
The companies expect to close the transaction in mid-2012, when Goodrich will become a wholly-owned subsidiary of United Technologies. The deal will see Goodrich shareholders receive US$127.50 in cash per common share, which represents a 47.4% premium to the target’s closing price on 15 September 2011, the day before the takeover rumours were reported. The offer price also represented a valuation multiple of 19.2x LTM EBITDA and 11.7x 2011 estimated EBITDA.
“We are pleased by the support of our shareholders, which confirms our confidence in the significant value that this business combination will create for our investors,” said Goodrich chairman and CEO Marshall Larsen.
Larsen continued: “We expect the increased global scale that this transaction provides will best position us for continued success and future growth across our many platforms. Together with United Technologies, we expect to advance the aerospace industry, and we look forward to an expeditious completion of this transaction in mid-2012.”
Announcing the deal late last year, United Technologies CFO Greg Hayes said the company planned to use 75% of debt and 25% of equity to fund the transaction. It has secured an initial US$15bn 364-day bridge loan with BofA Merrill Lynch, HSBC and JP Morgan to initially fund the transaction.
United Technologies is also revaluating its wider portfolio as part of the Goodrich deal, and has highlighted a number of assets to divest, including rocket systems developer Pratt & Whitney Rocketdyne, which was previously singled out for a possible sale in late 2011. Other assets the company has identified for sale include renewable energy firm Clipper Windpower, and three subsidiaries of aerospace manufacturer Hamilton Sundstrand Industrial: Milton Roy, Sullair and Sundyne. In total, United Technologies envisages raising US$3bn from net divestitures, as well as US$1.5bn from mandatory convertible instruments.
Chenevert said: “The proceeds from divestitures of non-core businesses will help minimize the equity issuance and reduce dilution from the Goodrich transaction.”
JP Morgan and Goldman Sachs advised United Technologies on the deal, with Wachtell, Lipton, Rosen & Katz providing legal advice. Goodrich was advised by Credit Suisse and Citigroup, along with law firm Jones Day.
Goodrich’s core business revolves around supplying aircraft landing gear, aircraft wheels and brakes, although the company also develops satellite systems, including the US Air Force’s ORS-1 satellite.
