Expanding energy transformation solutions and services.

Charlotte, North Carolina, USA, July 12, 2024 /PRNewswire/ -- Honeywell (NASDAQ: HON) and Air Products (NYSE: APD) announced that Honeywell has agreed to acquire Air Products' liquefied natural gas (LNG) process technology and equipment business for $1.81 billion in cash. The acquisition is valued at approximately 13 times the estimated 2024 earnings before interest, taxes, depreciation, and amortization (EBITDA) of the business.

Upon completion of the transaction, Honeywell will be able to offer customers a comprehensive, high-end solution to help them on their journey towards energy transformation. This all-new integrated solution will cover natural gas pretreatment and advanced liquefaction technology, and will leverage unified digital automation technology with interconnected services and the Experion platform. The full-service solution can provide efficient, reliable, and optimized natural gas asset management, and deliver outstanding value and support.

Currently, Honeywell provides pretreatment solutions for global liquefied natural gas customers, which is complemented by Air Products' liquefied natural gas process technology and equipment business to form a complete product portfolio, including the independent design and manufacture of spiral-wound heat exchangers (SWHE) and related equipment. SWHE can provide the highest natural gas throughput in a single exchanger while taking up less space, ensuring reliable, stable, and safe operation onshore and offshore.

"Although countries around the world are continuing to build future infrastructure based on renewable energy, natural gas, as a key low-emission and cost-effective transitional fuel, still helps meet the ever-growing and unpredictable global energy demand," said Vimal Kapur, Chairman and CEO of Honeywell. "This highly complementary acquisition will further strengthen our energy transformation product portfolio. Air Products' SWHE technology will immediately expand our base of users and create new compounded growth opportunities in after-sales service and digitization through the interconnected service platform."

"We have decided to divest our liquefied natural gas heat exchanger technology and equipment business, reflecting Air Products' continued focus on developing our core industrial gas business and relevant technology and equipment, and becoming a leader in providing large-scale clean hydrogen to decarbonize the industrial and heavy transportation sectors," said Seifi Ghasemi, Chairman, President, and CEO of Air Products. "LNG is a great business. With our employees' outstanding work, it has reached its peak after decades of development and will now become part of the relevant technology portfolio of Honeywell." Industry research shows that the global liquefied natural gas market has quadrupled in the past 20 years and is expected to double over the next 20 years, mainly due to demand from critical end markets, including power and data centers. [1]

"The integration of this outstanding team and proprietary technology acquired will empower Honeywell UOP to bring comprehensive, scalable solutions and services, helping our global clients achieve more sustainable and efficient energy practices on their complex transformation journey," said Ken West, President and CEO of Honeywell's Energy and Sustainable Technologies group.

Air Products' LNG business is headquartered in Allentown, Pennsylvania, USA, with approximately 475 employees, and has a 0.39 million square feet (approximately 36,000 square meters) manufacturing facility in Port Manatee, Florida, USA, producing spiral-wound heat exchangers of various sizes. This is the fourth acquisition announced by Honeywell this year as part of the company's rigorous capital deployment strategy. The company focuses on high-return acquisitions that will drive future growth of its investment portfolio and follow three major development trends of automation, future aviation, and energy transformation.

The transaction is expected to increase adjusted earnings per share in the first full year after completion, without being subject to any financing conditions, and is expected to be completed within the calendar year, subject to general closing conditions, including regulatory approvals.

About Honeywell

Honeywell is a high-tech enterprise in the Fortune Global 500. The company's business revolves around three development trends: automation, future aviation, and energy transformation. With Honeywell Accelerator Operation System and Honeywell Enterprise Intelligent Link Integrated Software Platform as the basis, it provides a wide range of technologies and services to multiple industries worldwide. As a trustworthy partner, Honeywell helps customers solve difficult and complex global challenges through Aerospace Hi-tech Holding Group, Intelligent Industrial Technology Group, Intelligent Building Technology Group, Energy and Sustainable Technology Group, providing feasible and innovative solutions to make the world more intelligent, safe and sustainable. In China, Honeywell implements the "East for East" strategy to promote business development through local innovation. Currently, all business groups of Honeywell have settled in China, and Shanghai is the headquarters of Honeywell Asia-Pacific. For more information about the company, please visit Honeywell China's website or follow Honeywell's official Weibo and WeChat accounts.