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RTX Corp 8-K Report, Material Agreement (Jul 31, 2012)

Filed July 31, 2012For Securities:RTX

Summary

United Technologies Corporation (UTC), now RTX Corp, announced on July 25, 2012, a definitive agreement to sell its industrial pumps and air compressors business to Silver II Acquisition S.à r.l., an entity formed by affiliates of The Carlyle Group and BC Partners. This divestiture is expected to generate approximately $3.46 billion in gross proceeds for UTC, subject to customary adjustments. The sale encompasses the capital stock and equity interests of certain subsidiaries engaged in the design, manufacture, sale, and aftermarket support of industrial pumps and air compressors. The transaction is subject to standard closing conditions, including regulatory approvals such as those under the Hart-Scott-Rodino Act and from the European Commission, as well as the absence of any material adverse effects. This strategic move by UTC signifies a focus on streamlining its portfolio and is a significant financial event for the company, highlighting its commitment to optimizing its business segments. Investors should note the substantial proceeds expected, which could be deployed for future strategic initiatives, debt reduction, or shareholder returns.

Key Highlights

  • 1UTC entered into a definitive Purchase and Sale Agreement to sell its industrial pumps and air compressors business (the 'Business') for approximately $3.46 billion.
  • 2The buyer is Silver II Acquisition S.à r.l., formed by affiliates of The Carlyle Group and BC Partners.
  • 3The transaction includes the sale of capital stock and equity interests of the Transferred Companies engaged in the specified business.
  • 4Closing of the transaction is contingent upon several conditions, including antitrust approvals from relevant governmental authorities (e.g., HSR Act, European Commission).
  • 5The Purchase Agreement contains customary representations, warranties, and covenants, with provisions for operating the business in the ordinary course until closing.
  • 6UTC is entitled to a reverse termination fee of $223.6 million under specific circumstances if the buyer fails to close.
  • 7Financing for the transaction is secured through equity commitments from the Sponsors and debt financing from a syndicate of financial institutions.

Frequently Asked Questions

United Technologies Corporation is selling its industrial pumps and air compressors business, including the design, manufacture, sale, and aftermarket support of these products.

The total proceeds from the transaction are expected to be approximately $3.46 billion, which includes $3.44 billion for the equity interests and approximately $20 million of cash to be retained by the Transferred Companies, subject to further adjustments.

The buyer is Silver II Acquisition S.à r.l., a private limited liability company formed by affiliates of The Carlyle Group and BC Partners.

Key conditions include the expiration or termination of waiting periods under antitrust laws (such as the Hart-Scott-Rodino Act), receipt of approvals from governmental antitrust authorities like the European Commission, the absence of any legal restraints preventing the transaction, and the absence of a Material Adverse Effect on the business being sold.