GenCorp To Acquire Pratt & Whitney's Rocketdyne for $550 Million
07/23/2012| 08:45am US/Eastern
By Tess Stynes
GenCorp Inc. (>> Gencorp Inc) agreed to acquire United Technologies Corp.'s (>> United Technologies Corporation) Rocketdyne business--currently part of Pratt & Whitney--for about $550 million.
The move is expected to nearly double the size of GenCorp, a maker of aerospace and defense products.
The deal comes as United Technologies has been aiming to sell some of its noncore businesses. The industrial conglomerate plans to use proceeds from the Rocketdyne sale to repay some debt related to its planned $16.5 billion acquisition of Goodrich Corp. (>> Goodrich Corporation).
The Wall Street Journal recently reported that United Technologies also is expected to settle on a private equity buyer for two units of its Hamilton Sundstrand subsidiary, a deal that could raise between $3 billion and $4 billion. Proceeds also would be used to help pay for the Goodrich deal.
GenCorp Chief Executive Scott Seymour on Monday said the Rocketdyne acquisition "provides additional growth opportunities as we build upon the complementary capabilities of each legacy company that has enabled a generation of human space travel and national security launch services."
Pratt & Whitney Rocketdyne is a provider of propulsion, power, energy and systems used in a wide variety of government and commercial applications, including the main engines for the Atlas and Delta launch vehicles.
The deal, expected to close in the first half of next year, is expected to add to GenCorp's earnings in the first year.
GenCorp shares closed Friday at $6.75 and were inactive premarket. The stock is up nearly 27% this year. United Technologies shares closed Friday at $74.23 and were inactive premarket.
Write to Tess Stynes at Tess.Stynes@dowjones.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires