July 24, 2012 / 5:43 AM / 5 years ago

Exclusive: Carlyle, BC eye United Tech unit - sources

NEW YORK (Reuters) - Private equity firms Carlyle Group LP (CG.O) and BC Partners Ltd have joined forces and are in advanced talks to buy United Technologies Corp’s (UTX.N) industrial businesses, according to three people familiar with the matter, in a deal that could be valued at more than $3.5 billion.

A general view of the lobby outside of the Carlyle Group offices in Washington, May 3, 2012. REUTERS/Jonathan Ernst

The private equity consortium has emerged as the leading candidate to buy the pump and compressor businesses within United Tech’s Hamilton Sundstrand subsidiary and a deal may come in the near future, the people said.

However, United Tech could still turn to other suitors, such as TPG Capital LP, which submitted final bids at the end of June and remain involved in the process, the people cautioned.

Representatives for United Tech, Carlyle, BC Partners and TPG declined to comment. The sources asked not to be named because the matter is not public.

The Hamilton Sundstrand industrial businesses are one of the three units United Tech Chief Executive Louis Chenevert put on the block in an effort to fund the diversified U.S. manufacturer’s $16.5 billion takeover of Goodrich Corp GR.N.

Sources familiar with the matter told Reuters previously that the Hamilton Sundstrand businesses could fetch more than $3.5 billion for the industrial conglomerate.

Earlier on Monday, United Tech announced a $550 million deal to sell its Rocketdyne space unit to GenCorp Inc GY.N. The company is also selling its Clipper Windpower unit.

United Tech’s Hamilton Sundstrand unit makes fluid control products and pumps under the Milton Roy and Sundyne brands. It also manufacturers air compressors under the Sullair brand.

Several industrial companies such as SPX Corp SPW.N, Flowserve Corp (FLS.N), Dover Corp (DOV.N), Atlas Copco AB (ATCOa.ST), Gardner Denver (GDI.N) looked at buying different parts of the business, but most have since dropped out, sources said previously.

United Tech received final bids for the businesses in the last week of June and has been weighing whether to sell pumps and compressors separately or sell both businesses to a single financial buyer, they added.

Reporting by Soyoung Kim and Greg Roumeliotis in New York; editing by Gary Hill and Andre Grenon

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