North American Windpower: UTC Completes Sale Of Clipper Windpower To Private Equity Firm

by NAW Staff on Wednesday 08 August 2012

United Technologies Corp. (UTC) has completed the sale of its Clipper Windpower unit to private equity firm Platinum Equity. The terms of the agreement were not disclosed.

UTC announced in March that it was selling Clipper as part of its plan to buy Goodrich Corp. In July, the company received the final regulatory approvals related to that transaction. As part of the Goodrich acquisition, UTC is also divesting its Pratt & Whitney, Rocketdyne, Milton Roy, Sullair and Sundyne business units.

According to Dan Shreve, director and partner at MAKE Consulting, it should come as no surprise that Clipper was sold to a private equity firm.

“The level of competition in the marketplace and impending downturn in the U.S. market made a sale of Clipper to an existing wind industry participant unfeasible, especially given the reliability concerns surrounding the Liberty platform,” Shreve tells NAW. “The acquisition of Clipper by a private equity group such as Platinum comes as no surprise, as the PE group will have greater flexibility in parsing out Clipper's assets."

Shreve adds that a strong return on Clipper’s service business is not necessarily guaranteed - at least for a while.

“However, even with almost 2 GW of installed turbines in the Americas, obtaining a strong return on Clipper's service business is not assured, as service pricing is under pressure from ISPs and asset owners with in-house service teams,” he says.

“Similarly, new product development endeavors will be difficult to monetize as potential adopters - existing turbine [original equipment manufacturers] - are under intense profit pressure, and product commercialization efforts often take two to five years,” he adds.

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