- CAES' high-reliability radio frequency technologies will
help drive long-term growth and further diversify revenue streams
on leading defense platforms
- Additional highly skilled engineers and automated facilities
will deepen Honeywell's aerospace expertise and operations,
strengthen offerings for customers
- CAES' established positions across leading U.S. military
platforms provide significant opportunities for international
growth
CHARLOTTE, N.C., June 20,
2024 /PRNewswire/ -- Honeywell (Nasdaq: HON)
announced today that it has agreed to acquire CAES Systems Holdings
LLC (CAES) from private equity firm Advent International for
approximately $1.9 billion in an
all-cash transaction. This represents approximately 14x estimated
2024 EBITDA on a tax-adjusted basis.
This acquisition will enhance Honeywell's defense technology
solutions across land, sea, air and space, including new
electromagnetic defense solutions for end-to-end radio frequency
(RF) signal management. With CAES' scalable offerings and
Honeywell's current defense and space portfolio, the combined
company will grow Honeywell's established production and upgrade
positions on critical platforms that include F-35, EA-18G, AMRAAM
and GMLRS, while also introducing offerings on new platforms like
Navy Radar (SPY-6) and UAS and C-UAS technologies. Based on current
and anticipated demand, these programs are expected to grow
significantly in the years to come, creating a favorable tailwind
for revenue growth of Honeywell's Aerospace Technologies
business.
"This acquisition further positions Honeywell at the forefront
of the defense industry's most dynamic sectors and sets the tempo
for continued growth across our aerospace business," said
Vimal Kapur, Chairman and CEO of
Honeywell. "With the integration of CAES' solutions and
capabilities, we will fortify our existing defense offerings, while
also expanding our capabilities in pivotal areas like RF, radar and
sensing technologies, to ensure a market-leading position in areas
that are critical for global security."
Headquartered in Arlington,
Va., CAES (formerly known as Cobham Advanced Electronic
Solutions) has 13 facilities in North
America, including highly automated manufacturing facilities
with fully automated test and tuning processes. The acquisition
will add approximately 2,200 employees and a deep bench of RF
engineering talent.
"The combination of our talented teams will diversify and deepen
our expertise and specialized capabilities that enable us to scale
current offerings and innovate new ones across critical military
platforms," said Honeywell Aerospace Technologies President and CEO
Jim Currier. "CAES' trusted position
with top U.S. defense customers strengthens our existing
relationships as we shape the future of the defense industry
together."
Looking ahead, Honeywell sees attractive opportunities to expand
the combined solutions internationally, capitalizing on accretive
growth spaces with select defense customers.
"As a trusted supplier and mission partner to our customers
across advanced RF capabilities, I couldn't be more excited to see
CAES join the Honeywell team and work together to build on the
outstanding expertise of both companies," said Mike Kahn, President and CEO of CAES. "Our
extraordinary talent, RF breadth and world-class manufacturing
facilities will offer new opportunities and further drive
innovation for our industry."
"This transaction marks a significant milestone for both
parties, and we are confident that the business will continue to
thrive and grow," said Shonnel
Malani, Managing Partner at Advent International. "Under
Advent International's ownership, we have invested significantly in
R&D, capital and capability enhancement, all of which has been
pursued to drive growth and the development of cutting-edge
capabilities. We believe this sale to a strong strategic home will
secure its long-term future."
This is the third acquisition Honeywell announced this year as
part of its disciplined capital deployment strategy. The company is
focused on high-return acquisitions that will drive future growth
across its portfolio, which is aligned with the three compelling
megatrends of automation, the future of aviation and energy
transition.
The CAES transaction, which is expected to be adjusted earnings
per share1 accretive in the first full year of
ownership, is not subject to any financing conditions and is
expected to close in the second half of 2024, subject to customary
closing conditions, including receipt of certain regulatory
approvals.
About Honeywell
Honeywell is an integrated operating company serving a broad
range of industries and geographies around the world. Our business
is aligned with three powerful megatrends – automation, the future
of aviation and energy transition – underpinned by our Honeywell
Accelerator operating system and Honeywell Forge IoT platform. As a
trusted partner, we help organizations solve the world's toughest,
most complex challenges, providing actionable solutions and
innovations through our Aerospace Technologies, Industrial
Automation, Building Automation and Energy and Sustainability
Solutions business segments that help make the world smarter, safer
and more sustainable. For more news and information on Honeywell,
please visit www.honeywell.com/newsroom.
We describe many of the trends and other factors that drive our
business and future results in this release. Such discussions
contain forward-looking statements within the meaning of Section
21E of the Securities Exchange Act of 1934, as amended (the
Exchange Act). Forward-looking statements are those that address
activities, events, or developments that management intends,
expects, projects, believes, or anticipates will or may occur in
the future. They are based on management's assumptions and
assessments in light of past experience and trends, current
economic and industry conditions, expected future developments, and
other relevant factors, many of which are difficult to predict and
outside of our control. They are not guarantees of future
performance, and actual results, developments and business
decisions may differ significantly from those envisaged by our
forward-looking statements. We do not undertake to update or revise
any of our forward-looking statements, except as required by
applicable securities law. Our forward-looking statements are also
subject to material risks and uncertainties, including ongoing
macroeconomic and geopolitical risks, such as lower GDP growth or
recession, capital markets volatility, inflation, and certain
regional conflicts, that can affect our performance in both the
near- and long-term. In addition, no assurance can be given that
any plan, initiative, projection, goal, commitment, expectation, or
prospect set forth in this release can or will be achieved. These
forward-looking statements should be considered in light of the
information included in this release, our Form 10-K and other
filings with the Securities and Exchange Commission. Any
forward-looking plans described herein are not final and may be
modified or abandoned at any time.
1 This release references certain non-GAAP
measures, including:
- Adjusted earnings per share, which is defined as diluted
earnings per share adjusted to exclude pension mark-to-market
expense, amortization of acquisition-related intangibles,
acquisition-related costs, and other items as described in
reconciliations provided when we disclose adjusted earnings per
share; and
- EBITDA, which we define as earnings before tax, depreciation
and amortization.
Management believes that, when considered together with reported
amounts, these measures are useful to investors and management in
understanding our ongoing operations and in the analysis of ongoing
operating trends.
Management does not consider these non-GAAP measures in
isolation or as an alternative to financial measures determined in
accordance with GAAP. The principal limitations of these non-GAAP
financial measures are that they exclude significant expenses and
income that are required by GAAP to be recognized in the
consolidated financial statements. In addition, they are subject to
inherent limitations as they reflect the exercise of judgments by
management about which expenses and income are excluded or included
in determining these non-GAAP financial measures.
Contacts:
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Media
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Investors
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Stacey Jones
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Sean Meakim
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Stacey.Jones@Honeywell.com
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Sean.Meakim@Honeywell.com
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