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CHARLOTTE, N.C. - Honeywell (NASDAQ: HON), a prominent industrial conglomerate with a market capitalization of $137.8 billion and a "GOOD" financial health rating according to InvestingPro, announced today its agreement to purchase Sundyne from Warburg Pincus for $2.16 billion in cash. The transaction values Sundyne at about 14.5 times its 2024 tax-adjusted EBITDA. Sundyne specializes in engineering pumps and gas compressors for the process industry.
The acquisition is set to strengthen Honeywell’s Energy and Sustainability Solutions (ESS) business by adding Sundyne’s products, which are crucial for energy security. With annual revenue of $38.5 billion and a solid gross profit margin of 38%, Honeywell appears well-positioned to integrate this acquisition. Sundyne’s technology and customer base will complement Honeywell UOP’s offerings in refining, petrochemicals, and renewable fuels. The integration will also include Honeywell Forge, an IoT platform, to digitalize Sundyne’s equipment, improving reliability and predictive maintenance.
Vimal Kapur, Honeywell’s Chairman and CEO, noted that the acquisition will enhance Honeywell UOP and foster strategic growth in key sectors. Sundyne’s CEO, Mary Zappone, expressed confidence that joining Honeywell will accelerate growth and efficiency gains for customers.
The deal is expected to immediately contribute to Honeywell’s sales growth, segment margin, and adjusted EPS in the first year post-acquisition. Sundyne adds approximately 1,000 employees and a significant recurring aftermarket revenue stream to Honeywell’s portfolio.
This acquisition is part of Honeywell’s ongoing portfolio transformation, which includes the planned separation of its Aerospace Technologies business and the spin-off of Advanced Materials. The company, currently trading near its InvestingPro Fair Value, has maintained dividend payments for 41 consecutive years with a current yield of 2.13%. Honeywell is on track to deploy at least $25 billion toward capital expenditures, dividends, share repurchases, and strategic acquisitions through 2025. For deeper insights into Honeywell’s valuation and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.
The purchase of Sundyne is anticipated to close in Q2 2025, pending standard closing conditions and regulatory approvals. The information in this article is based on a press release statement.
In other recent news, Honeywell International (NASDAQ:HON) is reportedly close to finalizing a $2.2 billion acquisition of Sundyne, a pump-and-compressor manufacturer. This acquisition is part of Honeywell’s active merger-and-acquisition strategy, which has seen the company announce approximately $10 billion in acquisitions this year. Additionally, Honeywell has announced plans to separate into three distinct publicly traded companies, focusing on Automation, Aerospace, and Advanced Materials, with the separation expected to be completed by 2026. Fitch Ratings has placed Honeywell’s ratings on Rating Watch Negative due to uncertainties surrounding the company’s future capital structure following the planned separation.
In executive news, Honeywell has appointed Mike Stepniak as its new Chief Financial Officer, succeeding Gregory P. Lewis (JO:LEWJ), who will transition to a newly created role. Meanwhile, Robin L. Washington will step down from the Board of Directors as she assumes a new position at Salesforce (NYSE:CRM). Honeywell’s management has expressed intentions to maintain strong investment-grade ratings post-separation, despite the current scrutiny from Fitch. The company has also committed to deploying at least $25 billion toward capital expenditures, dividends, share repurchases, and acquisitions through 2025.
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