Honeywell completes acquisition of Carrier's Global Access Solutions business

CHARLOTTE, N.C.—Honeywell has announced the completion of its acquisition of Carrier Global Corporation's Global Access Solutions business for $4.95 billion.

According to Honeywell, the deal positions the company as a leading provider of security solutions for the digital age with opportunities for accelerated innovation in the fast-growing, cloud-based services and solutions space.

This transaction also strengthens Honeywell's alignment of its portfolio around three compelling megatrends, including automation, and complements Honeywell's Building Automation segment.

The acquisition brings differentiated software capabilities through the addition of three respected brands to Honeywell's portfolio: LenelS2, a provider of commercial and enterprise access solutions; Onity, which offers electronic locks, specifically hospitality access and mobile credentials; and Supra, which specializes in cloud-based electronic lockboxes and scheduling software. Global Access Solutions' approximately 1,200 employees are now part of Honeywell. The transaction is expected to be adjusted earnings per share accretive in the first full year of ownership.

Global Access Solutions enhances Honeywell's Building Automation business model of leading with high-value products that are critical for buildings. Honeywell will also benefit from the business's attractive growth and margin profile, valuable software content, and accretive mix of recurring revenue, with forecasted annual sales in excess of $1 billion when combined with Honeywell's existing security portfolio.

"As the world's security needs evolve from a focus on protecting people to protecting both people and critical assets, we see strong growth prospects for our Access Solutions acquisition," said Vimal Kapur, CEO of Honeywell. "By building on our strong track record of delivering high-value building automation products, solutions, and services globally, this acquisition creates an exciting opportunity for us to achieve faster growth and further margin expansion, while generating better outcomes for our building automation customers."

Updated 2024 outlook

Beginning in the second quarter, Honeywell will exclude the impact of amortization expense for acquisition-related intangible assets and other acquisition-related costs, including the related tax effects, from segment profit¹ and adjusted earnings per share.

The company believes this change provides investors with a more meaningful measure of its performance period to period, aligns the measure to how management will evaluate performance internally, and makes it easier for investors to compare our performance to peers. Honeywell plans to provide historical non-GAAP financials under this new basis to facilitate comparability when the company reports its second quarter results in July 2024.

As a result of the acquisition closing, Honeywell has updated its full-year sales, segment margin, and adjusted earnings per share guidance, under the amended calculation. Full-year sales are now expected to be $38.5 billion to $39.3 billion, including organic sales growth of 4% to 6%. Segment margin is expected to be in the range of 23.8% to 24.1%, with segment margin expansion of 30 to 60 basis points. Adjusted earnings per share is expected to be in the range of $10.15 to $10.45. Operating cash flow is expected to be in the range of $6.7 billion to $7.1 billion, with free cash flow of $5.6 billion to $6 billion.

Honeywell also updated its second-quarter sales, segment margin, and adjusted earnings per share guidance. Second-quarter sales are expected to be $9.3 billion to $9.6 billion, with organic sales growth of 1% to 4%. Segment margin is expected to be 22.7% to 23.1%, down 40 basis points to flat compared to the prior year period. Adjusted earnings per share is expected to be in the range of $2.35 to $2.45, up 2% to 7% compared to the prior year.