Economy

Rockwell Collins sold to United Technologies for $22.75B

The Cedar Rapids, Iowa-based company, which operates a service center at Wichita Eisenhower National Airport, will operate under the new name of Collins Aerospace Systems following its acquisition by United Technologies Corp. This will be one of the biggest transactions in aviation history. Schwab Charles Investment Management Inc. now owns 408,655 shares of the aerospace company's stock valued at $39,705,000 after purchasing an additional 15,531 shares during the last quarter.

"Because the deal is structured as a conventional acquisition with debt, United Tech has to pay some of this off before doing anything else", said Robert Stallard, analyst at Vertical Research Partners. Citigroup Inc. lifted their target price on shares of Rockwell Collins from $93.00 to $140.00 and gave the stock a neutral rating in a research report on Tuesday, August 15th.

United Technologies will see "a pretty significant hit" to near-term earnings per share, with one third of the deal being paid for with equity, they said. United Technologies is known through several brands such as Pratt & Whitney and Otis escalator and specializes in the manufacture of a high-performance aircraft engine. To put this into perspective, in July, Boeing announced its intention to set up a factory unit tasked with producing avionics and electronic systems, similar to the products UTC and Rockwell make. Under UTC Aerospace, the Pueblo factory in 2015 launched an $82 million expansion that also was expected to add more than 40 jobs to its workforce of more than 200.

This acquisition adds tremendous capabilities to our aerospace businesses and strengthens our complementary offerings of technologically advanced aerospace systems.
The original version of this story can be accessed at https://www.dispatchtribunal.com/2017/09/05/capital-analysts-llc-buys-new-stake-in-rockwell-collins-inc-col.html. The rest would be redeemed as shares in United Technologies. The company recently declined a deal to acquire an entity known as Honeywell International.

The aerospace industry is plagued by the high cost of components especially by airframe manufacturers like Boeing and Airbus.

Rockwell Collins has a customer base that spans the world's largest airlines, airports and private-jet operators.

Rockwell Collins CEO Kelly Ortberg will be the CEO of the new, combined company. Collins was the earliest makers of short0wave radios and other communication devices.

That unit, which UTC expects to bring in more than $23bn in sales a year, will make aeroplane seats, landing systems and other parts for commercial and military planes.



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