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Honeywell Completes $4.95 Billion Acquisition of Carrier's Global Access Solutions Business
Charlotte, N.C., June 3, 2024 – Honeywell (NASDAQ: HON) has announced the completion of its acquisition of Carrier Global Corporation's (NYSE: CARR) Global Access Solutions business for $4.95 billion. This strategic acquisition positions Honeywell as a leading provider of security solutions in the digital age, enhancing its building automation segment and aligning with key megatrends such as automation and digitalization.
Key Highlights of the Acquisition
- Acquisition Cost: $4.95 billion
- Brands Added: LenelS2, Onity, Supra
- Employee Transition: Approximately 1,200 employees
Strengthening Honeywell’s Portfolio
The addition of Carrier's Global Access Solutions business bolsters Honeywell’s portfolio with:
- LenelS2: Leader in commercial and enterprise access solutions
- Onity: Expert in electronic locks, hospitality access, and mobile credentials
- Supra: Specializes in cloud-based electronic lockboxes and scheduling software
This acquisition is expected to be accretive to adjusted earnings per share within the first full year of ownership.
Financial Impact and Updated Guidance
Honeywell has updated its financial outlook for 2024 to reflect the impact of this acquisition. Key financial metrics include:
- Full-Year Sales: $38.5 billion to $39.3 billion
- Organic Sales Growth: 4% to 6%
- Segment Margin: 23.8% to 24.1%
- Adjusted Earnings Per Share: $10.15 to $10.45
- Operating Cash Flow: $6.7 billion to $7.1 billion
- Free Cash Flow: $5.6 billion to $6.0 billion
Strategic Benefits
The acquisition of Global Access Solutions provides several strategic benefits:
- Enhanced Building Automation Segment: The new business complements Honeywell’s existing security portfolio and contributes over $1 billion in annual sales.
- High-Value Products and Recurring Revenue: The acquisition adds valuable software content and a mix of recurring revenue, enhancing growth and margins.
- Alignment with Automation Megatrend: Strengthens Honeywell’s focus on automation and digitalization.
Updated Non-GAAP Reporting Metrics
Starting in Q2 2024, Honeywell will exclude amortization expenses for acquisition-related intangible assets and other acquisition-related costs from its segment profit and adjusted earnings per share metrics. This change aims to provide investors with a clearer view of the company’s performance and facilitate comparison with peers.
Table 1: Full-Year 2024 Guidance
| Metric | Previous Guidance | Impact of Acquisition | Guidance After Acquisition | Impact of Non-GAAP Reporting Change | Updated Guidance |
|---|---|---|---|---|---|
| Sales | $38.1B - $38.9B | ~$0.4B | $38.5B - $39.3B | — | $38.5B - $39.3B |
| Organic Growth | 4% - 6% | — | 4% - 6% | — | 4% - 6% |
| Segment Margin | 23.0% - 23.3% | (0.2)% | 22.8% - 23.1% | 1.0% | 23.8% - 24.1% |
| Adjusted Earnings Per Share | $9.80 - $10.10 | ($0.15) | $9.65 - $9.95 | $0.50 | $10.15 - $10.45 |
| Operating Cash Flow | $6.7B - $7.1B | — | $6.7B - $7.1B | — | $6.7B - $7.1B |
| Free Cash Flow | $5.6B - $6.0B | — | $5.6B - $6.0B | — | $5.6B - $6.0B |
Forward-Looking Statements and Risks
Honeywell’s forward-looking statements are based on current expectations and assumptions, subject to risks and uncertainties, including macroeconomic and geopolitical factors. These statements are not guarantees of future performance, and actual results may differ significantly.
(Source: Honeywell)
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