UTX United Technologies Corporation

By Aisha Al-Muslim 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (May 19, 2018).

United Technologies is selling the Taylor Co., which produces ice-cream and frozen-drink machines, to Middleby Corp. for $1 billion in cash, as the industrial conglomerate works to sharpen its focus on its core businesses.

United Technologies -- which owns jet-engine maker Pratt & Whitney, Otis elevators and Carrier air conditioners -- said Taylor had been part of its climate, controls and security unit.

In 2017, Taylor generated about $315 million of revenue and $65 million of adjusted earnings before interest, taxes and depreciation, according to Middleby. United Technologies generated a total of $59.84 billion in net sales last year.

Elgin, Ill.-based Middleby, a manufacturer of food-service equipment, said the acquisition will bolster its position in the commercial food-service industry. Rockton, Ill.-based Taylor's product line also includes beverage machines and automated double-sided grills. Taylor's products are used in quick serve, casual dining, retail, convenience stores and institutional food-service establishments.

The Taylor sale is expected to close early in the third quarter, the companies said Friday.

The deal comes as United Technologies is pushing to close one of the biggest aerospace deals ever and weighs a breakup, a move Bill Ackman's Pershing Square Capital Management LP and Daniel Loeb's Third Point LLC have been pushing the company to pursue. United Technologies agreed in September to buy Rockwell Collins for $23 billion. The Farmington, Conn., company has said it would conduct a portfolio review to examine a split, a process it expects to complete by year-end.

In separating, Rockwell would merge with United Technologies's aviation-services division and Pratt & Whitney engines division to form a large aviation company, while both the climate, controls and security division and Otis elevators business would become separate companies.

Middleby plans to finance its purchase of Taylor with an existing credit line. The company said it expects the acquisition to increase its earnings per share within the first year after closing.

The Taylor management team is expected to continue to run the business and operate from its existing facilities, Middleby said.

United Technologies shares, up 4.9% in the last 12 months, fell 0.1% to $125.05 in after-hours trading Friday. Shares of Middleby, down 19% in the past year, were unchanged at $104.45.

Write to Aisha Al-Muslim at aisha.al-muslim@wsj.com

(END) Dow Jones Newswires

May 19, 2018 02:47 ET (06:47 GMT)

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