• Purchase price of $4.95 billion represents ~13x 2023E EBITDA, inclusive of tax benefits and run-rate cost synergies
• Acquisition will strengthen Honeywell’s strategic alignment to the megatrend of automation, underpinned by digitalization
• Transaction will be immediately accretive to Honeywell’s growth, gross margins and operating margins; cash-EPS accretive in the first full year of ownership
• By fifth full year of Honeywell ownership, acquisition will achieve a double-digit cash-ROIC 

Honeywell announced plans to enhance and strengthen its building automation capabilities with the acquisition of Carrier Global Corporation’s (NYSE: CARR) Global Access Solutions business for $4.95 billion, in an all-cash transaction.

This acquisition will enable Honeywell to become a leading provider of security solutions for the digital age. 

The acquisition, which includes both hardware and software solutions, further supports Honeywell’s recently announced plans to align its portfolio to three compelling megatrends: automation, the future of aviation and energy transition, underpinned by robust digitalization capabilities and solutions.

The Global Access Solutions business will enhance Honeywell Building Technologies’ business model of leading with high-value products that are critical for buildings.

The business brings an attractive growth and margin profile that will be accretive to Honeywell with valuable software content, resilient business model and strong sources of recurring revenue. The acquisition will add three respected brands to Honeywell’s portfolio with a focus on life safety and digital access solutions.

This includes:

• LenelS2, a leading business for over 25 years in commercial and enterprise access solutions, including well-known offerings OnGuard and NetBox, used by numerous Fortune 100 customers.
• Onity, which offers electronic locks, including hospitality access, mobile credentials, and self-storage access. Nine of the ten top hotel chains are customers.
• Supra’s cloud-based electronic real estate lockboxes offer mobile credentials and access management, as well as a leading digital platform to optimize scheduling for property showings.

When the deal closes, the combined company will be able to accelerate innovation, bringing products and capabilities to customers that are increasingly moving to cloud-based services and solutions.

“Honeywell’s strong track record delivering building automation products and services makes this a natural fit that will create a leading security platform with forecasted annual revenue in excess of $1 billion,” said Vimal Kapur, Chief Executive Officer, Honeywell.

“By leveraging the capabilities of the combined company’s advanced security and safety systems, customers will be able to maximize their performance, efficiency and cost-effectiveness and create long-term, sustainable value.”

The purchase price represents approximately 13x 2023E EBITDA, inclusive of tax benefits and run-rate cost synergies. The transaction is expected to be cash-EPS accretive in the first full year of ownership.

The transaction is expected to close by the end of the third quarter of 2024, subject to customary closing conditions, including receipt of certain regulatory approvals.

Evercore Inc. is serving as financial advisor to Honeywell. Skadden, Arps Slate, Meagher & Flom, Simmons & Simmons and Womble Bond Dickinson are providing external legal counsel.

Honeywell is an integrated operating company serving a broad range of industries and geographies around the world.  Their business is aligned with three powerful megatrends – automation, the future of aviation and energy transition – underpinned by Honeywell Accelerator operating system and Honeywell Connected Enterprise integrated software platform. visit: honeywell.com

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Source: honeywell.com