There is nothing genius about this deal. UTC needed Rocketdyne off the books for the Goodrich deal. They call the banks up, and like magic, a substandard company was able to
pick them up..Rocketdyne is a class act, but expensive. UTC has a bunch off pull on wall street. If they do not land the next big rocket replacement, big trouble for both.
The new Aerojet-Rocketdyne combo is the greatest combination since peanut butter and jelly. And to think that all Scott Seymour had to do was answer the phone when the investment bankers for UT called, and then after talking it over, say "Yes, we'll buy Rocketdyne." Through some dumb luck, even an inept, slothful CEO is starting to look like a genius. Goes to show you just how important and powerful luck can be in life--even more so than skill, talent, and ability. I guess Obama is the perfect example of that principle.
GY earnings last 12 months: EPS is .10. Why would other company sell if the division was profitable. My guess earnings will still be nominal but the size of GY will be almost double. Usually a premium is paid when a company buys another company or a part of another company. Thus I do not understand why GY is up close to $1 which is a 14% gain from Friday's close.
Monroe74, I asked myself the same question. Presumably, PWR was sold in a competitive auction, and of course UTX could have decided to keep it. It's an all cash deal, so GY should enjoy very cheap financing - but isn't that largely captured by the deal price? What have I missed that GY now is worth 15% more from this deal?