Dive Brief:
- Honeywell has completed its acquisition of Carrier Global Corp.’s security business, Global Access Solutions, for $4.95 billion.
- The acquisition adds three software brands to Honeywell’s portfolio — LenelS2, Onity and Supra, Honeywell said in a news release Monday. LenelS2 provides physical security solutions including access control, mobile credentials and video surveillance, according to its website. Onity provides electronic locking systems and mobile access to hospitality businesses and military, government and corporate commercial organizations. Supra specializes in cloud-based electronic lockboxes, scheduling software and access solutions, including digital keys.
- Honeywell expects the acquisition will increase its full year 2024 sales by roughly $400 million to $38.5 billion to $39.3 billion, including 4% to 6% in organic sales growth. The company expects sales in the second quarter to be between $9.3 billion and $9.6 billion, with 1% to 4% in expected organic sales growth.
Dive Insight:
The deal’s closing comes after first-quarter sales revenue from Honeywell’s building automation segment fell 3% year over year to $1.43 billion, with a 10% drop in building product sales revenue.
Honeywell said its acquisition of Carrier’s Global Access Solutions would generate opportunities for accelerated innovation in cloud-based services and strengthen its building automation business model of “leading with high-value products that are critical for buildings.”
Honeywell also expects to benefit from the acquired business unit’s “attractive growth and margin profile, valuable software content and accretive mix of recurring revenue,” with annual sales projected to exceed $1 billion when combined with Honeywell’s existing security portfolio, according to its news release.
"As the world's security needs evolve from a focus on protecting people to protecting both people and critical assets, we see strong growth prospects for our Access Solutions acquisition," Honeywell CEO Vimal Kapur said in a statement. "By building on our strong track record of delivering high-value building automation products, solutions, and services globally, this acquisition creates an exciting opportunity for us to achieve faster growth and further margin expansion, while generating better outcomes for our Building Automation customers."
When the agreement to offload Carrier’s global access solutions business to Honeyell was announced last December, Carrier Chairman and CEO David Gitlin said the sale, along with the company’s planned exits of four other businesses, would “accelerate [Carrier’s] growth strategy and focus.”
In March, Carrier announced an agreement to sell its Industrial Fire business to Sentinel Capital Partners for approximately $1.43 billion. In December, the company announced that it had signed an agreement to sell its Commercial Refrigeration business to its decades-long joint venture partner Haier for $775 million. Both of these transactions are slated to wrap in the third quarter, Gitlin said in a separate news release announcing the completion of its transaction with Honeywell.
Carrier has also initiated the sale process of its Commercial and Residential Fire businesses, it said.“Today marks the first completed sale as part of Carrier’s portfolio transformation,” Gitlin said.
Carrier is also working to expand its share of the U.S. data center market, including water- and air-cooled chillers, according to its first quarter earnings presentation.
