United Technologies Corp. (UTC) has signed a definitive agreement to purchase the GE Security business from General Electric (GE) for $1.82 billion. The deal has been approved by the boards of both companies, but closing depends on regulatory approvals.
GE Security, which includes the fire detection systems operations that were once Edwards Systems Technology, purchased from SPX Corp. in 2005, supplies security and life safety technologies for commercial and residential applications that include fire detection and life safety systems, intrusion alarms, and video surveillance and access control systems.
GE chose to divest the GE Security group as part of a larger effort to shed what it considers non-core units, including a potential deal to sell NBC Universal to Comcast.
“The Security business required significant investment in its capabilities to evolve and better serve the security industry,” said Charlene Begley, president and CEO, GE Enterprise Solutions, which includes GE Security, in a press statement.
The combination with UTC will benefit customers, said GE Security president and CEO Dean Seavers. “Customers will see increased breadth and depth of product offerings, as well as a global reach that serves a range of industry segments,” said Seavers. “This is a great move for our Security business because we are bringing together teams who are committed to growing their presence in the security industry.”
GE Security is headquartered in Bradenton, Fla., and has eight manufacturing facilities and approximately 4,700 employees in 26 countries. The unit will become part of UTC Fire & Security, a Connecticut-based unit of UTC led by William Brown.
“This acquisition enhances UTC Fire & Security’s status as a leading franchise in the $100 billion global fire safety and electronic security industry,” said UTC President and Chief Executive Louis Chênevert. “It strengthens our North America footprint, extends our capabilities and complements our existing fire and security businesses.”
Earlier this year, the company also acquired Detection Logic Fire Protection.
UTC is a conglomerate that produces Sikorsky helicopters, Otis elevators and Carrier air conditioners. The company has “made no secret of its hunger for deals,” said a recent report in the New York Times. As of last month, the company had spent only about $560 million of the $2 billion it has earmarked for acquisitions this year, Gregory J. Hayes, CFO, said on a conference call with analysts last month.