UTC Fire & Security, a division of United Technologies Corp. (UTX), has acquired a majority of the shares of Simtronics ASA. The target, based in Norway, is a provider of gas and flame detector systems, extinguishing solutions for the marine industry.
The acquisition will enable UTX to expand high quality gas and flame detection products, as well as provide gaseous suppression solutions to its customers.
United Technologies has strong market positions in aerospace/defense and global infrastructure with a portfolio that includes: Carrier, Otis, Hamilton Sundstrand, Pratt & Whitney, Sikorsky and UTC Fire & Security.
In addition to restructuring savings, the company is also seeing the benefits of other cost reduction actions in areas such as travel, furloughs and E&D employee attrition. The company’s cost reduction initiatives have led to a year-over-year increase in its consolidated and segment margins and have also expanded earnings.
The company’s most significant actions were at Carrier, related to ongoing portfolio transformation initiatives in overhead cost reduction projects, and at Hamilton Sundstrand, which continued to advance the low-cost sourcing strategy.
The financial performance of the company depends on conditions in the construction and aerospace industries. The company is also highly dependent on the U.S. government’s budgetary allocation for defense.
A reduction in capital spending in the commercial aviation or defense industries could have a significant effect on demand for UTX’s products, which could have an adverse effect on its financial performance or its results of operations. Its business may also be affected by government contracting risks.
The company’s UTC Fire and Security segment provides electronic security products comprising intruder alarms, and access control and video surveillance systems; fire safety products, such as specialty hazard detection and fixed suppression products, fire extinguishers, fire detection and life safety systems, and other firefighting equipment; systems integration, video surveillance, installation, maintenance, and inspection services; and monitoring, response, and security personnel services.
United Technologies Corporation provides high technology products and services to the building systems and aerospace industries worldwide. Growth is attributable to acquisitions and the internal development of existing businesses.
Otis, Carrier and UTC Fire & Security (collectively referred to as the commercial businesses) serve customers in the commercial and residential property industries worldwide; Carrier also serves commercial, industrial, transport refrigeration and food service equipment customers.
Pratt & Whitney, Hamilton Sundstrand and Sikorsky (collectively referred to as the aerospace businesses) primarily serve commercial and government customers in both the original equipment and aftermarket parts and services markets of the aerospace industry; Hamilton Sundstrand and Pratt & Whitney also serve customers in certain industrial markets. Honeywell International Inc (HON) is a major competitor.
We currently have a Neutral recommendation on United Technologies Corporation.
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