M&A market has ‘firmed up’-United Tech CFO
Higher price expectations may make it tougher for big U.S. companies to reach takeover deals this year, a top executive at United Technologies suggested on Wednesday.
“Prices have recovered, and I think that’s maybe the message of the day as we think about the M&A pipeline,” Greg Hayes, chief financial officer of the world’s largest maker of elevators and air conditioners told analysts on a conference call. “There (are) still a lot of targets out there, but pricing has certainly firmed up from what it was a year ago when we talked about being aggressive on the acquisition front.”
United Tech officials repeatedly said last year they were looking to take advantage of the worst economic downturn since the 1930s to create opportunities to strike deals at attractive prices, and in March publicly entertained the idea of buying Bell helicopter, a unit of Textron Inc.
The Hartford, Connecticut-based company in November reached a $1.82 billion deal to buy General Electric’s security business. But don’t look for United Tech to make many, if any, big buys this year.
Instead, it will focus on smaller investments — like the $271 million stake it took in wind turbine manufacturer Clipper Windpower last month.
“We’re not looking to do a big deal,” Hayes said. “We’re looking for are more deals like Clipper Windpower where we can add to some of our capabilities and take advantage of some good valuations. You may see more smaller deals like that during the course of the year.”