GenCorp Enters into Definitive Agreement to Acquire Pratt & Whitney Rocketdyne from United Technologies Corporation

United Technologies Corp. said Monday it is selling Canoga Park-based Pratt & Whitney Rocketdyne, which helped propel the nation’s exploration in space, to Sacramento-based GenCorp Inc. for $550 million. (Dean Musgrove/Staff Photographer)

Canoga Park-based Pratt & Whitney Rocketdyne sold to GenCorp for $550M

By Gregory J. Wilcox, Staff Writer

ited Technologies Corp. said Monday it is selling Canoga Park-based Pratt & Whitney Rocketdyne, which helped pioneer the nation’s exploration of space, to Sacramento-based GenCorp Inc. for $550 million.

UTC has owned Pratt & Whitney Rocketdyne for seven years.

http://www.youtube.com/watch?v=wynOKjPTmZU

Rocketdyne’s engines powered astronauts to the moon in the 1960s and 1970s as part of the famed Apollo program and later boosted the Space Shuttle fleet to lengthy orbits of Earth and to the International Space Station. Rocketdyne was combined with Pratt & Whitney under UTC in 2005.

GenCorp spokesman Glenn Mahone said there won’t be any immediate changes at the newly acquired unit but would not discuss developments like staffing levels until after the deal closes.

“Because of regulation and other requirements, I’m not at liberty to discuss specific things like that,” he said.

GenCorp’s biggest component is Aerojet, which also makes rocket engines. The combined company will not have much overlap, Mahone said.

It is also too soon to say what will happen to the Rocketdyne name, which dates to the post-World War II era. But it has survived numerous ownership changes.

“We are in the regulatory stage and that would be a bit premature,” Mahone said of a name change. “I’m sure no discussions have been made relative to that.”

Both companies expect the deal to close in the first half of 2013.

“GenCorp and PWR have complementary products and technology services making for a combined company that will be a critical contributor to our nation’s strategic access to space,” Pratt & Whitney Rocketdyne spokeswoman Erin Dick said in an email.

PWR has about 1,400 employees in Los Angeles County, most of them at facilities on Canoga Avenue in Canoga Park and DeSoto Avenue in Northridge.

Dick did not offer specifics about any staffing changes while the deal goes through the federal review process.

“We will evaluate our workforce to ensure we are staffed to continue delivering on our customer commitments while ensuring we are as lean and efficient as possible,” she wrote.

GenCorp, which also has a real estate component, is not getting all of Pratt & Whitney Rocketdyne. UTC is retaining ownership of the 47-acre Canoga campus and has ambitious plans for the land.

A year ago the company filed plans with the city of Los Angeles for a 6 million-square-foot residential, retail and office complex anchored by a 16-story hotel at Victory Boulevard and Canoga Avenue.

PWR will lease the property back from UTC while it consolidates operations into the DeSoto campus, which is expected to be completed next year, Dick said.

“All other decisions related to operations, facilities and corporate structure will be determined by GenCorp once the sale is complete,” Dick said.

Hartford, Conn.-based UTC has been shopping Pratt & Whitney Rocketdyne since March to help pay for its acquisition of Goodrich Corp. in Charlotte, N.C.

“We are pleased to announce GenCorp’s agreement to purchase Rocketdyne. It is a significant step in our ongoing portfolio transformation,” UTC Chairman & Chief Executive Officer Louis Ch nevert said in the statement. “While it is not core to UTC’s commercial building systems and aerospace businesses, Rocketdyne is a solid company and a national asset with many talented employees.”

UTC is a diversified company providing high technology products and services to the building and aerospace industries.

GenCorp Chief Executive Officer Scott Seymour said the acquisition of Rocketdyne will help enhance its competitive edge.

“We see great strategic value in this transaction for the country, our customers, partner supply base and our shareholders,” Seymour said in a written statement. “The combined enterprise will be better positioned to compete in a dynamic, highly competitive marketplace, and provide more affordable products for our customers.”

The Rocketdyne purchase almost doubles the size of GenCorp and provides additional growth opportunities, he said.

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Press Release

SACRAMENTO, Calif., July 23, 2012 /PRNewswire via COMTEX/ — GenCorp Inc. GY +12.30% , headquartered in Sacramento, California, announced today that it has signed a definitive agreement to acquire Pratt & Whitney Rocketdyne (PWR) from United Technologies Corporation UTX -1.28% for $550 million.

“We see great strategic value in this transaction for the country, our customers, partner supply base and our shareholders,” GenCorp Chief Executive Officer Scott Seymour said. “The combined enterprise will be better positioned to compete in a dynamic, highly competitive marketplace, and provide more affordable products for our customers.”

“In addition, this transaction almost doubles the size of our company and 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. We have the opportunity to build upon the proud heritage of our companies, the ability to create increased value for our customers and, best of all, to secure the future of both organizations,” Seymour continued.

PWR, headquartered in Canoga Park, California, is a provider of high-value propulsion, power, energy and innovative system solutions used in a wide variety of government and commercial applications, including the main engines for the Atlas and Delta launch vehicles, missile defense systems and advanced hypersonic engines.

The purchase price of $550 million, which is subject to adjustment for working capital and other specified items, is expected to be financed with a combination of cash on hand and issuance of debt. The acquisition of PWR is conditioned upon, among other things, the receipt of required regulatory approvals and other customary closing conditions. Subject to the satisfaction of these conditions, the acquisition is expected to close in the first half of 2013. The transaction is expected to be accretive to earnings in the first year.

Citigroup Global Markets Inc. is acting as exclusive financial advisor to GenCorp for this transaction. In addition, Morgan Stanley Senior Funding LLC and Citigroup Global Markets Inc. are providing fully committed financing to support this transaction.

Forward-Looking StatementsThis press release contains “forward-looking statements” as that term is defined in the U.S. Private Securities Litigation Reform Act of 1995. No forward-looking statement can be guaranteed, and actual results may differ materially from those projected depending on a number of risks, uncertainties and other factors such as business climate, economic and competitive uncertainties, adverse legal and regulatory developments, and adverse changes in economic and political climates around the world. Such risks, uncertainties and other factors include, among other things: the possibility that the expected efficiencies and cost savings from the proposed transaction will not be realized, or will not be realized within the expected time period; the ability to obtain governmental approvals of the transaction on the proposed terms and schedule contemplated by the parties; and the possibility that the proposed transaction does not close, including, but not limited to, due to the failure to satisfy the closing conditions. Forward-looking statements in this document should be evaluated together with the many factors that affect GenCorp’s business as described in more detail in GenCorp’s Form 10-K for the year ended November 30, 2011, and any subsequent quarterly reports on Form 10-Q and current reports on Form 8-K filed with the U.S. Securities and Exchange Commission.

About GenCorpGenCorp is a leading technology-based manufacturer of aerospace and defense products and systems with a real estate segment that includes activities related to the entitlement, sale, and leasing of the company’s excess real estate assets. Aerojet is a world-recognized aerospace and defense leader providing propulsion and energetics to its space, missile defense, strategic, tactical missile and armaments customers throughout domestic and international markets. Additional information about GenCorp and Aerojet can be obtained by visiting the companies’ websites at http://www.GenCorp.com and at www.Aerojet.com .

Contact information:Investors: Kathy Redd, chief financial officer 916.355.2361Media: Glenn Mahone, vice president, communications 202.302.9941

SOURCE GenCorp Inc.

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