Deal represents Honeywell’s effort to align products with automation ‘megatrend.’
Honeywell has announced its acquisition of Carrier’s security business, Global Access Solutions, which includes the LenelS2, Supra and Onity brands. With the deal, totaling US$4.95 billion, Honeywell aims to become what is calls a “leading provider of security solutions in the digital age.”
According to Honeywell’s press release, the $4.95 billion represents approximately 13 times 2023 EBITDA, inclusive of tax benefits and run-rate cost synergies. Carrier is global leader in intelligent climate and energy solutions. In a separate press release, Carrier says it expects net proceeds from the transaction to be approximately $4 billion and intends to use the proceeds to pay down debt.
With the acquisition, Honeywell gets three well-known brands under Carrier’s Global Access Solutions business. These are Lenel, Supra and Onity. The brands have a strong focus on mobile credentials, electronic access control and cloud solutions that are gaining momentum in security and well support users’ continued efforts in digital transformation.
Mobile credentials for example are picking up steam as they allow better security and easier credential issuance/onboarding. Meanwhile, access control is no longer just for security purposes. They can be part of the building automaton platform and provide insights into occupancy as well as energy and space usage, allowing the building to be secure, green and sustainable.
Indeed, these seem to be incentives that form the rationale behind the acquisition.
“This acquisition will enable Honeywell to become a leading provider of security solutions for the digital age,” the company said. “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.”
“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 of 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.”
"Global Access Solutions is a great business with dedicated, customer-focused teams, and we look forward to watching its continued growth under the ownership of Honeywell," said Carrier Chairman & CEO David Gitlin. "The transaction, together with the planned exits of our Industrial Fire, Residential and Commercial Fire, and Commercial Refrigeration cabinet businesses, will accelerate our growth strategy and focus, positioning Carrier to deliver higher growth and superior shareholder value and further reinforcing our track record of performing while transforming."
According to the Honeywell press release, 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.