Honeywell boosts building security operations with $4.95 billion deal for Carrier unit By Reuters

By Natán Gómez

(Reuters) – U.S. industrial company Honeywell (NASDAQ ) said on Friday it would buy the security unit of air conditioning maker Carrier for $4.95 billion in cash to strengthen its building security business, whose growth has slowed in recent years. last months.

The deal is Honeywell's largest under new CEO Vimal Kapur and will offer access to Carrier 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 offers residential, commercial and industrial security systems. The company was in talks with advisers to spin off its fire and security business, Reuters reported earlier this year.

“Strategically, this is a Honeywell acquisition. They were the most logical buyer, so it's not a surprise, although the multiple is certainly much higher, as has already been noted,” said Nigel Coe, an analyst at Wolfe Research.

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

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

“Our concern with the deal is that it appears Honeywell is paying a maximum multiple for maximum 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 generate cash earnings per share for 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 the debt. His fire and security unit accounted for about 17% of his total sales last year.

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