- Acquisition will build on Honeywell's energy transition
capabilities by creating an end-to-end offering for customers
worldwide
- The combination will create new opportunities for
diversified growth and innovation in aftermarket services and
software
- Transaction is expected to be immediately accretive to
Honeywell's sales growth and segment margin while also accretive to
adjusted EPS in the first full year of ownership
- Air Products to continue its focus on its industrial gas
business and related technology and equipment and driving the
energy transition through clean hydrogen at scale
CHARLOTTE, N.C., July 10,
2024 /PRNewswire/ -- Honeywell (Nasdaq: HON)
and Air Products (NYSE:APD) jointly announced today that
Honeywell has agreed to acquire Air Products' liquefied natural gas
(LNG) process technology and equipment business for $1.81 billion in an all-cash transaction. This
represents approximately 13x estimated 2024 EBITDA.
As a result of the acquisition, Honeywell will be able to offer
customers a comprehensive, top-tier solution for managing their
energy transformation journey. The new holistic offering will
encompass natural gas pre-treatment and state-of-the-art
liquefaction, utilizing digital automation technologies unified
under the Honeywell Forge and Experion platforms. This full-service
solution will enable efficient, reliable and optimized management
of natural gas assets, delivering unparalleled value and
support.
Currently, Honeywell provides a pre-treatment solution serving
LNG customers globally. Air Products' complementary LNG process
technology and equipment business consists of a comprehensive
portfolio, including in-house design and manufacturing of
coil-wound heat exchangers (CWHE) and related equipment. CWHEs
provide the highest throughput of natural gas in a single exchanger
with a small footprint and robust, reliable and safe operations
both onshore and offshore.
"While the world continues to build the renewables-based energy
infrastructure of the future, natural gas is a critical
lower-emission and affordable transition fuel that will help meet
ever-increasing and dynamic global energy demands," said
Vimal Kapur, Chairman and CEO
of Honeywell.
"This highly complementary acquisition will further strengthen
our energy transition portfolio, and Air Products' CWHE technology
will immediately expand our installed base - creating new
opportunities to compound growth in aftermarket services and
digitalization through our Honeywell Forge platform," Kapur
added.
"The decision to divest our LNG heat exchanger technology and
equipment business reflects Air Products' continued focus on its
two-pillar strategy -- to grow our core industrial gas business and
related technology and equipment, and to be a first-mover
delivering clean hydrogen at scale to decarbonize industrial and
heavy-duty transportation sectors," said Air Products' Chairman,
President and Chief Executive Officer Seifi Ghasemi. "The LNG business is a great
business and at its strongest point in its decades-long history
thanks to the outstanding work of our people, and they will be in
good hands to advance as part of Honeywell's related portfolio of
technologies."
The LNG market has quadrupled over the past 20 years and is
expected to double over the next two decades, driven by demand in
key end markets including power and data centers according to
industry research.1
Ken West, President and
CEO of Honeywell's Energy and Sustainability Solutions (ESS)
segment, said, "The integration of this talented team and the
acquired proprietary technologies will enable Honeywell UOP to
bring a full spectrum of scalable solutions and services that help
our global customers navigate the complex journey to more
sustainable and efficient energy practices."
Air Products' LNG Business has approximately 475 employees with
headquarters in Allentown,
Pennsylvania and a 390,000-square-foot manufacturing
facility in Port Manatee, Florida,
where all sizes of CWHEs are made.
This is the fourth acquisition Honeywell has 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.
This transaction, which is expected to be adjusted earnings per
share accretive in the first full year of ownership is not subject
to any financing conditions and is expected to close before the end
of the calendar year, subject to customary closing conditions,
including receipt of certain regulatory approvals.
Editor's Note: Link to Photo- A completed LNG heat exchanger
manufactured at Air Products' Port
Manatee facility is being loaded on a carrier at the Port of
Manatee for shipment to the
customer.
1LNG industry trends | Deloitte US
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:
- Segment margin, which is defined as segment profit divided by
net sales; segment profit, on an overall Honeywell basis, is
defined as operating income, excluding stock compensation expense,
pension and other postretirement service costs, amortization of
acquisition-related intangibles, certain acquisition-related costs,
and repositioning and other charges.
- Adjusted earnings per share, which is defined as diluted
earning per share adjusted to exclude pension mark-to-market
expense, amortization of acquisition-related intangibles, certain
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 financials 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.
About Air Products
Air Products (NYSE:APD) is a
world-leading industrial gases company in operation for over 80
years focused on serving energy, environmental, and emerging
markets. The Company has two growth pillars driven by
sustainability. Air Products' base business provides essential
industrial gases, related equipment and applications expertise to
customers in dozens of industries, including refining, chemicals,
metals, electronics, manufacturing, and food. The Company also
develops, engineers, builds, owns and operates some of the world's
largest clean hydrogen projects supporting the transition to low-
and zero-carbon energy in the heavy-duty transportation and
industrial sectors. Additionally, Air Products is the world leader
in the supply of liquefied natural gas process technology and
equipment, and provides turbomachinery, membrane systems and
cryogenic containers globally.
The Company had fiscal 2023 sales of $12.6 billion from operations in
approximately 50 countries and has a current market
capitalization of over $50 billion.
Approximately 23,000 passionate, talented and committed employees
from diverse backgrounds are driven by Air Products' higher purpose
to create innovative solutions that benefit the environment,
enhance sustainability and reimagine what's possible to address the
challenges facing customers, communities, and the world. For more
information, visit www.airproducts.com or follow us on LinkedIn, X,
Facebook or Instagram.
Cautionary Note Regarding Forward-Looking
Statements
This release contains "forward-looking
statements" within the safe harbor provisions of the Private
Securities Litigation Reform Act of 1995, including statements
about the transaction that is the subject of this release and its
expected impact and timing, and about the company's business
outlook and investment opportunities. These forward-looking
statements are based on management's expectations and assumptions
as of the date of this release and are not guarantees of future
performance. While forward-looking statements are made in good
faith and based on assumptions, expectations and projections that
management believes are reasonable based on currently available
information, actual performance and financial results may differ
materially from projections and estimates expressed in the
forward-looking statements because of many factors, including the
risk factors described in our Annual Report on Form 10-K for the
fiscal year ended September 30, 2023
and other factors disclosed in our filings with the Securities and
Exchange Commission. Except as required by law, we disclaim any
obligation or undertaking to update or revise any forward-looking
statements contained herein to reflect any change in the
assumptions, beliefs or expectations or any change in events,
conditions or circumstances upon which any such forward-looking
statements are based.
Contacts:
Honeywell
Media
Stacey Jones (980) 378-6258
Stacey.Jones@Honeywell.com
Investors
Sean Meakim
(704) 627-6200
Sean.Meakim@Honeywell.com
Contacts:
Air
Products
Media
Katie
McDonald (610) 481-3673
mcdonace@airproducts.com
Investors
Sidd
Manjeshwar (610)
481-1872
manjessj@airproducts.com
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SOURCE Honeywell