Honeywell (NASDAQ:HON) said on Friday it would buy air conditioner maker Carrier’s (NYSE:CARR) security business for $4.95 billion.
The Florida-based company’s Access Solutions security business provides residential, commercial and industrial security systems including electronic locks and remote access management.
It intends to use estimated net proceeds of about $4 billion from the deal to pay down debt.
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.
The news comes after Honeywell named insider Vimal Kapur as CEO earlier this year and in October realigned its business focus on three “compelling megatrends” - automation, the future of aviation and energy transition.
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 Honeywell CEO Vimal Kapur.
HON shares dropped $2.06, or 1%, to $195.72, while those for CARR sprang $3.42, or 6.5%, to $56.31.
