Carrier and Tyler Refrigeration: An Acquisition for Growth

Carrier, a division of multibusiness United Technologies Corporation (UTC), is looking for ways to grow its business. Carrier is considering expansion into commercial refrigeration and is examining a proposed purchase of Tyler Corporation--a major player in the display-case market. The case provides detail on various segments of the heating and cooling markets and thus allows analysis of the attractiveness of these segments to Carrier. The case also provides detailed forecasts for students to use in valuing the target, Tyler. The mechanics of a basic valuation are straightforward. There are, however, several opportunities for a more refined analysis. Excerpt UVA-F-1312 CARRIER AND TYLER REFRIGERATION: AN ACQUISITION FOR GROWTH In late November 1997, Mary Martin, Carrier's director of Business Development, was reviewing the business case related to the acquisition of Tyler Refrigeration Corp. Tyler was a leading North American manufacturer of refrigerated display cases. This product line was one of several that Carrier was considering as a possible expansion of its presence in the commercial refrigeration market. The deal was important enough to both Carrier and its parent, United Technologies Corporation (UTC), that Carrier and UTC headquarters were jointly managing the due diligence and negotiations with input from the business functions involved. After almost 10 years with UTC, Martin had played a key role in defining strategy within Carrier, sifting through expansion ideas for those that provided the best fit and the highest profitability. She was the key contact for Carrier's legal team, sitting next to them during negotiations to provide feedback on offers. In preparing the acquisition proposal that would make its way through UTC for signature and approval, Martin was once again considering Tyler's fit to Carrier's strategy and what price Carrier should pay for the company. Carrier History . . .