Honeywell CEO discusses security unit deal with Carrier Global

By:
on Dec 8, 2023
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  • Carrier Global agrees to sell its security unit to Honeywell.
  • Honeywell CEO Kapur discussed the deal on CNBC's today.
  • Carrier stock is up 5.0% on Friday; Honeywell down 1.0%.

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Carrier Global Corp (NYSE: CARR) is up 5.0% on Friday after Honeywell International Inc (NASDAQ: HON) said it will buy the multinational’s security unit for $4.95 billion.

Carrier will now get to lower its debt

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Carrier plans on using proceeds from the sale of its Global Access Solutions business to pay down debt, as per the press release.

On Friday, the New York-listed firm also announced plans of reinstating share repurchase once its leverage returns to roughly two times its annual EBITDA. The said agreement is subject to customary closing conditions including regulatory approvals.

The news arrives more than a month after Carrier said its per-share earnings came in ahead of Street estimates for the third quarter even though the revenue fell shy of expectations.

Shares of the HVAC company have still gained about 20% over the past six weeks.

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What’s in it for Honeywell International?

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Honeywell International will integrate Global Access Solutions that houses 1,200 employees into its building automation unit.

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The acquisition that is expected to expand its footprint in cloud-based products will be immediately accretive to its per-share earnings. Vimal Kapur – the Chief Executive of Honeywell said today on CNBC’s “Squawk on the Street”:

We are excited about this business and how it becomes accretive to Honeywell both for growth and for the margins.

Honeywell International expects to close this transaction before the final quarter of 2024. The Nasdaq-listed firm that Wall Street currently rates at “overweight” on average had about $7.70 billion in cash and equivalents as of the end of September.

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