United Technologies to Acquire GE Security
UTC built its
Fire & Security unit earlier this decade with purchases of Lenel Systems
Int’l Inc., an access control and software developer; Chubb, a fire safety and
security services business; Kidde, a British fire and safety company; and Red
Hawk, which installs, integrates and services a range of security technology
products and solutions.
Chenevert promoted Ari Bousbib as president of the Fire & Security unit,
along with UTC’s Otis and Carrier commercial divisions. During a Webcast of the
Citi Industrial Manufacturing & Transportation Conference on Thursday,
Bousbib emphasized the company’s strategy of offering service contracts for
commercial building systems, thereby locking in future revenue streams.
“Our strategy is
to build a new equipment service model,” Bousbib said during the Webcast. “We
are going to take this business and develop an aftermarket.”
UTC said it
expects the transaction to be earnings neutral in 2010, due to restructuring
and transaction costs, but will likely generate growth in 2011 and beyond. A
closing date was not provided.
For GE, the sale
advances the company’s efforts to shed noncore assets and focus on its core
strategic businesses. In April, GE sold a majority stake in GE Security’s
homeland protection business to Paris-based Safran SA.
GE first entered
the electronic security industry in late 2001 with the acquisition of
Interlogix, which itself was created from the merger of Interactive
Technologies Inc. (ITI) and SLC Technologies in 2000. Several noteworthy
acquisitions followed, including InVision Technologies Inc. and the $1.4
billion purchase of fire-prevention equipment maker Edwards Systems Technology
from SPX Corp in 2005.