Honeywell International Inc HON has agreed to acquire Carrier Global Corporation's CARR Global Access Solutions business for $4.95 billion in an all-cash transaction.
Carrier's Global Access Solutions business has approximately 1,200 employees operating in 33 countries.
The deal, which includes both hardware and software solutions, further supports Honeywell's plans to align its portfolio to automation, the future of aviation and energy transition.
The acquisition will add three brands to Honeywell's portfolio, focusing on life safety and digital access 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 CEO Vimal Kapur.
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 company expects the transaction to close by the end of the third quarter of 2024.
Honeywell held $7.8 billion in cash and equivalents as of September 30, 2023.
Carrier expects net proceeds from the transaction to be approximately $4 billion and intends to use the proceeds to pay down debt. The company anticipates resuming share repurchases as soon as its net leverage returns to approximately 2x EBITDA.
Price Action: HON shares are trading lower by 2.58% at $192.68, while CARR is up 5.50% at $55.80 in premarket on the last check Friday.
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