In a strategic move to bolster its energy and sustainability solutions segment, Honeywell International has unveiled plans to acquire Sundyne, a manufacturer of pumps and gas compressors, for $2.16 billion in cash. This acquisition will enhance Honeywell's universal oil products business, providing a significant advantage in the process industries market.
The financial terms of the deal reflect a valuation of approximately 14.5 times Sundyne's expected earnings before interest, taxes, depreciation, and amortization (EBITDA) in 2024 on a tax-adjusted basis. Sundyne, renowned for its pumps and compressors utilized in various industries, is poised to contribute to Honeywell's growth trajectory.
CEO Vimal Kapur emphasized the importance of this acquisition, stating, 'This acquisition will further enhance our dynamic Honeywell UOP business and create strategic growth opportunities in attractive verticals.' The integration of Sundyne’s extensive portfolio of pumps and compressors will not only solidify Honeywell's brand standing within the process industry but will also open up substantial opportunities for expanding its aftermarket services. The acquisition is anticipated to positively impact Honeywell’s adjusted earnings per share in its first full year of ownership, alongside immediate contributions to sales growth and margin enhancement.
The combined operations are expected to unlock 'material run-rate revenue synergies' with Honeywell UOP’s process licensing and modular business. Following regulatory approvals, the deal is projected to close during the second quarter. Notably, Sundyne will introduce around 1,000 skilled employees to Honeywell, elevating the organization’s capacity to generate recurring aftermarket revenue.
Sundyne's CEO, Mary Zappone, remarked, 'There are numerous benefits that we can achieve together with Honeywell that will accelerate growth and improve efficiency for customers.' Furthermore, Dan Zamlong, managing director at Warburg Pincus, noted that Sundyne's diversified end markets, product offerings, and optimized operations position it for sustained, above-market growth. This acquisition comes on the heels of Honeywell's recent announcement regarding its plans to separate its automation and aerospace businesses, transitioning each into independently traded entities, along with a planned spin-off of its advanced materials business.
With a stock price of $209.88, Honeywell faced a recent decline of 1.01%..