By Nina Trentmann 

Carrier Corp. on Friday named a new finance chief, a move that comes as the heating-and-cooling-systems company prepares to spin off from United Technologies Corp. next year.

The company said Timothy McLevish would become its next chief financial officer, effective Oct. 1. Mr. McLevish replaces acting CFO Mark George, who left to become CFO of railway operator Norfolk Southern Corp.

Mr. McLevish previously served as finance chief at drugstore operator Walgreens Boots Alliance Inc., food maker Kraft Foods Group Inc. and manufacturing company Ingersoll Rand PLC, among other positions. Most recently, he served as senior adviser to Walgreens Chief Executive Stefano Pessina on strategic partnerships and mergers and acquisitions.

Carrier, with net sales of $18.9 billion in 2018, offers products and services ranging from air conditioning and refrigerated transport to building security, fire extinguishers and smoke detectors.

The company is in the process of separating from United Technologies, the industrial conglomerate that is breaking itself into three entities. After the split, slated to be completed in 2020, Carrier and the Otis elevator business will be separate firms, with United Technologies focusing on aerospace.

Carrier is seeking approval from regulators on its future tax and capital structure and is setting up its own management and finance systems, United Technologies Chief Executive Gregory Hayes said at an investor conference Thursday.

"Most of the legal entity restructuring activities still have to occur," Mr. Hayes said, according to a transcript. "But the real sort of hard lifting is around the digital front. We're replicating the systems and all of that, hiring a bunch of people."

About 600 consultants have been working on the separation since it was announced in November, according to Nigel Coe, a managing director at investment research firm Wolfe Research.

United Technologies has forecast separation costs of about $1.5 billion for Carrier this year, part of which will be tax-related as the new company will no longer benefit from some of the conglomerate's tax arrangements.

Once Carrier has become a separate entity, management will train its lens on reviewing the company's portfolio, Mr. Coe said. That could lead to the sale of some assets, he said, listing Chubb, a commercial insurance business, and the Kidde fire protection unit as possibilities.

"The appointment of Mr. McLevish reinforces the notion that substantial portfolio change will likely follow at Carrier following its spin out of United Technologies next year," said Julian Mitchell, an analyst at Barclays PLC.

Carrier is emerging from United Technologies with about $12 billion to $14 billion in debt, and Mr. McLevish will be focused on bringing that down, Mr. Coe said. The ratio between debt and earnings before interest, taxes, depreciation and amortization for the new company is expected to range from 3.0 times to 3.5 times, which is high for the industry, according to Mr. Coe.

"We are deeply confident that he [Mr. McLevish] will help Carrier achieve our financial goals and position us to deliver strong value and growth for our shareholders," Carrier Chief Executive David Gitlin said in a statement.

Write to Nina Trentmann at Nina.Trentmann@wsj.com

 

(END) Dow Jones Newswires

September 13, 2019 17:34 ET (21:34 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.
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