Carrier Global Corporation has sold its security business, Global Access Solutions, to Honeywell in an all-cash transaction worth $US4.95 billion.
The sale agreement includes industry leading brands such as LenelS2, Supra and Onity as well as Industrial Fire, Residential and Commercial Fire, and its Commercial Refrigeration cabinet businesses.
It is the first step in Carrier’s portfolio transformation and covers 1200 employees in 33 countries.
Carrier's Global Access Solutions business is an innovative global leader in advanced access and security solutions, electronic locking systems, and contactless mobile key solutions.
Carrier chair & CEO, David Gitlin, said Global Access Solutions is a great business with dedicated, customer-focused teams.
“We look forward to watching its continued growth under the ownership of Honeywell," he said.
"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 $US4 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.
Beginning in the fourth quarter of 2023, Carrier expects to classify the Global Access Solutions business as "held for sale" on the balance sheet, but the results will remain in continuing operations until the sale closes.
The proposed sale is subject to regulatory approvals and customary closing conditions. It is expected to close before the end of Q3 2024.
In a statement, Honeywell said this acquisition will enable the company to become a leading provider of security solutions for the digital age.
“The acquisition supports Honeywell’s recently announced plans to align its portfolio to three compelling megatrends: automation, the future of aviation and energy transition, underpinned by robust digitalization capabilities and solutions,” the statement said.
“The Global Access Solutions business will enhance Honeywell Building Technologies’ business model of leading with high-value products that are critical for buildings.
The business brings an attractive growth and margin profile that will be accretive to Honeywell with valuable software content, resilient business model and strong sources of recurring revenue.”
When the deal closes, the combined company will be able to accelerate innovation, bringing products and capabilities to customers that are increasingly moving to cloud-based services and solutions.
Honeywell CEO, Vimal Kapur, 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.
“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,” Kapur said.
LenelS2 is a 25-year-old business with well-known offerings OnGuard and NetBox, which is used by numerous Fortune 100 customers.
Onity provides electronic locks, including hospitality access, mobile credentials, and self-storage access. Nine of the 10 top hotel chains are customers.
Finally, Supra’s cloud-based electronic real estate lockboxes offer mobile credentials and access management, as well as a leading digital platform to optimize scheduling for property showings.