Carrier Global Corp. entered into a definitive agreement to sell its security business, Global Access Solutions, which includes the LenelS2, Supra and Onity brands, to Honeywell for $4.95 billion.
The deal represents approximately 17x 2023 expected EBITDA. The sale agreement is a successful first step in Carrier’s portfolio transformation, the company said.
With approximately 1,200 employees operating in 33 countries, Carrier’s Global Access Solutions business manufacturers advanced access and security solutions, electronic locking systems, and contactless mobile key solutions. The transaction will allow the business to build on the strength of its leading brands, innovative solutions, strong partner relationships and high growth potential, the company said.
“Global Access Solutions is a great business with dedicated, customer-focused teams, and we look forward to watching its continued growth under the ownership of Honeywell,” stated Carrier Chairman & CEO David Gitlin. “The transaction, together with the planned exits of our Industrial Fire, Residential and Commercial Fire, and Commercial Refrigeration cabinet businesses, will accelerate our growth strategy and focus, positioning Carrier to deliver higher growth and superior shareholder value and further reinforcing our track record of performing while transforming.”
Carrier expects net proceeds from the transaction to be approximately $4 billion and intends to use the proceeds to pay down debt. The company anticipates resuming share repurchases as soon as its net leverage returns to approximately 2x EBITDA.
Honeywell said the acquisition, which includes both hardware and software solutions, further supports its recently announced plans to align its portfolio to three megatrends: automation, the future of aviation and energy transition, underpinned by robust digitalization capabilities and solutions. The Global Access Solutions business will enhance Honeywell Building Technologies’ business model of leading with high-value products that are critical for buildings, the company said.
“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, CEO, Honeywell. “By leveraging the capabilities of the combined company’s advanced security and safety systems, customers will be able to maximize their performance, efficiency and cost-effectiveness and create long-term, sustainable value.”
The proposed sale is subject to regulatory approvals and customary closing conditions. It is expected to close before the end of Q3 2024.
Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC are serving as financial advisor to Carrier. Paul, Weiss, Rifkind, Wharton & Garrison LLP and Linklaters LLP are providing external legal counsel.
Evercore Inc. is serving as financial advisor to Honeywell. Skadden, Arps Slate, Meagher & Flom, Simmons & Simmons and Womble Bond Dickinson are providing external legal counsel.