* CFO: Second-round bids for pump, compressor units end-June
* Businesses could fetch more than $3.5 bln -sources
* TPG, Carlyle, BC Partners, mull buying both units -sources
* United Tech may also sell assets from fire & security
By Soyoung Kim and Scott Malone
NEW YORK/BOSTON, June 14 United Technologies
Corp expects to receive second-round bids for its
industrial units that make pumps and compressors by the end of
June, and could announce a deal in the third quarter, the
company's chief financial officer said on Thursday.
Greg Hayes, speaking at an investor meeting in Chicago, said
the auction process remains "robust" with "lots of interest"
from private equity buyers, but also from other industrial
The diversified conglomerate is selling the industrial
businesses of its Hamilton Sundstrand unit in an effort to fund
its $16.5 billion takeover of aircraft components maker Goodrich
Corp. People familiar with the matter have said these
units combined could be valued at more than $3.5 billion.
"Some of the strategics are having a little bit more
difficulty with their own stock price down but these are great
properties and I think with the cost of capital where it is
today, it's a pretty compelling case for somebody that has a
strategic fit that these businesses really are worth the price,"
Private equity firms TPG Capital, Carlyle Group
and BC Partners remain involved in the process and are
considering buying both pump and compressor businesses, people
familiar with the matter said this week.
Other bidders are evaluating offers for either pumps or
compressors only, the people said.
Dover Corp and Atlas Copco are interested
in buying the pump business, while Gardner Denver Inc,
Onex Corp and Advent International among others have
been pursuing compressors, they said.
Flowserve Corp and SPX Corp also expressed
interest in buying the pump business, according to the people
familiar with the matter, but two of the people said these
companies' interest has cooled in recent weeks.
The pump business for sale has roughly $200 million in
estimated 2012 earnings before interest, tax, depreciation and
amortization (EBITDA) and may go for as much as 12 times EBITDA,
sources said previously.
The compressor business has some $160 million in forward
EBITDA and may be sold for 8 to 9 times EBITDA, the sources have
It remains to be seen if United Tech will choose to sell
both pumps and compressors businesses to a single buyer, or sell
them separately. The company is expected to weigh the potential
valuation gains from selling them to different buyers, versus
the simplicity of a deal in selling everything in one
transaction, the people said.
Representatives for Carlyle, TPG, BC Partners and Advent
International declined to comment while Onex did not have an
immediate comment. Dover, Atlas Copco, Flowserve, SPX and
Gardner Denver all declined to comment.
MORE ASSET SALES
"We would hold onto the Hamilton Sundstrand businesses if we
can't get what we consider to be a fair and reasonable price,"
"I think it's still going to happen this year, I think we
would have an announcement in the third quarter and close in the
The company may have a bit more selling to do this year,
Hayes said, adding that it has recently completed a review of
its fire and security operations - which make sprinkler systems
and alarms - and is considering selling some of that portfolio
"It'll be a very focused look at the portfolio," he said.
"They're pretty much done with the analysis and over the next
couple of months you'll hear about more divestitures."
Hayes also said United Tech is evaluating "strategic
alternatives" for its fuel-cell business.