Carrier's New CFO to Guide Spinoff From United Technologies
September 13 2019 - 5:49PM
Dow Jones News
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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