Breaking News
Get 40% Off 0
👀 Reveal Warren Buffett's stock picks that are beating the S&P 500 by +174.3% Get 40% Off

Honeywell boosts building safety ops with $4.95 billion deal for Carrier unit

Published Dec 08, 2023 06:52AM ET Updated Dec 08, 2023 11:01AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. A logo of Honeywell is pictured on their booth during the European Business Aviation Convention & Exhibition (EBACE) in Geneva, Switzerland, May 22, 2017. REUTERS/Denis Balibouse/File Photo
 
HON
-0.03%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
CARR
+1.60%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By Nathan Gomes

(Reuters) -U.S. industrial firm Honeywell (NASDAQ:HON) said on Friday it would buy air conditioner maker Carrier's security unit for $4.95 billion in cash to bulk up its building safety business where growth has slowed in recent months.

The deal is Honeywell's biggest under new CEO Vimal Kapur and will offer access to Carrier's brands such as electronic lock maker Onity, used by many major hotel chains, and cloud-based lock maker Supra.

Carrier's Access Solutions security business provides residential, commercial and industrial security systems. The company was in talks with advisors to spin off its fire and security business, Reuters reported earlier this year.

"Strategically, this is a hand-in-glove acquisition for Honeywell. It was the most logical buyer and so this is not a surprise, although the multiple is certainly much higher as already noted," said Wolfe Research analyst Nigel Coe.

Shares of Florida-based Carrier rose 4.3% to $55.17 in early trade, while Honeywell fell about 1.4%.

The deal will help bolster Honeywell's building technologies business, which has been struggling with low revenue growth this year due to weak demand. Honeywell's overall performance, however, has been supported by strong results in its aviation business.

"Our concern with the deal is that it appears Honeywell is paying a peak multiple on peak non-residential construction activity," said UBS analyst Chris Snyder.

The all-cash deal is expected to close before the end of the third quarter of 2024 and will be cash-earnings per share accretive to Honeywell in the first full year of ownership.

Carrier said it intends to use the deal's estimated net proceeds of about $4 billion to pay down debt. Its fire and security unit accounted for about 17% of its total sales last year.

($1 = 0.9306 euros)

Honeywell boosts building safety ops with $4.95 billion deal for Carrier unit
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your investing.com profile, will be public on investing.com and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email