8:45 p.m. | Updated
United Technologies is exploring a potential takeover of Goodrich, a maker of airplane components, people briefed on the matter said Friday, as the conglomerate seeks to grow through a major deal.
United Technologies, whose wide array of holdings range from Pratt Whitney to Sikorsky Aircraft to the Otis Elevator Company, has been studying several companies as potential deal candidates, some of these people said.
They added that as recently as Friday, the company was in talks to secure several billion dollars worth of debt financing. It is possible that United Technologies may decide not to strike a deal, these people cautioned.
United Technologies has exchanged communications with Goodrich over the last several months, another person briefed on the matter said.
A spokesman for United Technologies declined to comment. A representative for Goodrich was not immediately available for comment.
Shares in companies that were rumored to be potential United Technologies takeover targets, which also include Rockwell Collins and Textron, rose on Friday. Reuters first reported United Technologies’ efforts to secure deal financing.
Shares in United Technologies closed on Friday at $75.50, down 11 cents, giving it a market value of $68.6 billion.
A deal by United Technologies would be the latest by a company seeking growth through acquisitions, at a time when companies have been hard-pressed to increase their profits internally. Financing remains relatively cheap for borrowers with strong credit ratings, while many companies have been holding billions of dollars in cash on their balance sheets since the end of the financial crisis.
United Technologies had $5.4 billion in cash and short-term investments on hand as of June 30.
Shareholders have often rewarded the deal-as-growth strategy this year. Several corporate buyers have seen their stocks rise on the day a deal is announced. That is an unusual reversal, since investors usually sell shares in an acquirer for fear that it is overpaying for a company.
A deal for Goodrich, which has a market value of $11.6 billion, would be the largest by United Technologies in recent memory. The conglomerate’s biggest deal over the last 12 years was the $3.8 billion takeover of Sundstrand, another airplane parts maker, in 1999, according to the data provider Capital IQ.
United Technologies’ top executives have made no secret that they consider acquisitions a key growth strategy. “You’re going to see us put our balance sheet to work, you’re going to see us put more cash to work on the M.A. side,“ Gregory J. Hayes, the company’s chief financial officer, said in July, according to Reuters.
The company has been an active deal maker over the last three years. In 2009, it purchased General Electric’s fire alarm and security systems unit for $1.8 billion.
In 2008, it began a hostile bid for Diebold, a maker of automated teller machines and security systems, that went on for months but called off its efforts after the onset of the financial crisis. Since then, it has shied away from unsolicited offers.
United Technologies’ shares rose 10.3 percent over the last 12 months ended Thursday.
Should it strike a deal for Goodrich, United Technologies would acquire a big maker of aircraft landing gear, as well as engine maintenance equipment and electrical systems for planes.
The company traces its roots to B. F. Goodrich, a former Civil War surgeon who founded a rubber company in Akron, Ohio, in 1870. It grew to become one of the biggest tire makers in the world, eventually diversifying into the manufacturing of components for commercial and military aircraft.
It is currently based in Charlotte, N.C., and has 25,600 employees. The company no longer has a relationship to the B. F. Goodrich tire brand, having sold that to Michelin in 1988.
Last year, Goodrich reported nearly $7 billion in revenue and $578.7 million in net income. The company’s shares rose 22.8 percent over the last 12 months ended Thursday.
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