After completing two major aerospace acquisitions, United Technologies' next major company purchase will likely come in a different industry, a foreign business and not for a few years.
"I wouldn't look at anything bit coming out of UTX for a few years," says chief financial officer Greg Hayes, speaking to analysts on a teleconference call about second quarter results.
The corporate headquarters is still focused on absorbing the combined acquisitions of Goodrich and International Aero Engines, which also led to the spin-off of the Pratt & Whitney Rocketdyne and Power Systems businesses. United Technologies is also using cash reserves to pay down debt.
The company has hundreds of millions of dollars reserved for mergers and acquisitions activity, but no major purchases are planned in the immediate future, he says.
The next move the company makes will likely involve United Technologies' commercial industrial business units, such as elevator manufacturer Otis and the UTC Climate, Controls and Security business, Hayes says.
"Urbanisation will drive stronger organic growth for years to come on the commercial side," he adds.
Hayes also advised analysts to look to companies in foreign countries as UTC's most likely acquisition targets. United Technologies has $5 billion in cash, but most of that stockpile is held in foreign accounts. It would be "very expensive" for the company to repatriate the cash to US-owned accounts. That means it would be more affordable for United Technologies to re-invest the cash in foreign businesses.
"As you think about the [mergers and acquisitions] agenda, that's probably where to look next," Hayes says.