CARR shares rose 5.9% on the news while HON fell 0.9%.
The purchase price reflects approximately 13 times the 2023 estimated EBITDA, inclusive of tax benefits and anticipated cost synergies.
This strategic move is expected to be immediately accretive to Honeywell's cash-EPS in the first full year of ownership, contributing to growth, gross margins, and operating margins.
"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, Honeywell.
The acquisition aligns with Honeywell's goal to accelerate innovation, particularly in cloud-based services and solutions, addressing the evolving needs of customers. The combined company aims to deliver enhanced products and capabilities.
Carrier Global Corporation anticipates net proceeds of around $4 billion from the transaction, with plans to utilize the funds for debt reduction.
The company expects to resume share repurchases once net leverage returns to approximately 2x EBITDA. The deal is projected to close by the end of the third quarter of 2024.
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