Sikorsky could become a standalone company after a tax-free spinoff under one option now being reviewed by parent company United Technologies (UTC), the company announced late on 11 March.
The Stratford, Connecticut-based helicopter manufacturer has been a founding member of UTC since 1929, but it has increasingly come under scrutiny by Wall Street investors as a poor fit under that corporate structure.
As late as December, a newly-appointed chief executive at UTC, Gregory Hayes, had continued his predecessor’s defence of Sikorsky as a critical member of a corporation that also includes engine manufacturer Pratt & Whitney and aircraft electronics and systems supplier United Technologies Aerospace Systems.
UTC, however, announced launching a strategic business review of the company in early February. The review considers divesting a business unit that failed to meet certain performance criteria, including whether it generates earnings growth above gross domestic product, operating margins above 15% on a sustainable basis, returns in excess of invested capital and a track record of reliable cash flow.
“We are exploring strategic options for Sikorsky to determine the best way to enhance its long-term success and create improved long-term value for UTC's customers and shareholders,” Hayes says.
"Looking to the future, we are evaluating whether Sikorsky's unique business as a rotorcraft OEM with a predominately military customer base is best positioned as a stand-alone company, and whether a separation would allow United Technologies to better focus on providing high-technology systems and services to the aerospace and building industries."
"Today, Sikorsky is a world leader in the design, manufacture and service of military and commercial helicopter platforms. It has unmatched technological capabilities, outstanding people and a strong backlog," added Hayes. "Looking to the future, we are evaluating whether Sikorsky's unique business as a rotorcraft OEM with a predominately military customer base is best positioned as a stand-alone company, and whether a separation would allow United Technologies to better focus on providing high-technology systems and services to the aerospace and building industries."
The review should be completed by the end of the year, but UTC has set to “specific timetable” for making a final decision.
The statement released by UTC does not discuss the possibility of selling Sikorsky to another company or group of investors, although it says there is more than one option being reviewed.
Sikorsky chief executive Mick Mauer, interviewed by Flightglobal at the Heli-Expo convention on 3 March, declined to make any comment about the company’s role in the UTC strategic business review.
The strategy review was launched after former UTC CEO Louis Chenevert abruptly resigned in late November. He was succeeded by Hayes, the former chief financial officer of UTC.
Source: FlightGlobal.com
