Carrier Global Corporation to sell security business to Honeywell for $5bn

In a major development in the technology and security solutions sector, Carrier Global Corporation (NYSE: CARR) has entered into a definitive agreement to sell its security business, Global Access Solutions, to Honeywell (NASDAQ: HON) for an enterprise value of $4.95 billion. This transaction, representing approximately 17 times the expected 2023 EBITDA, marks a successful first step in Carrier’s portfolio transformation.

Global Access Solutions, comprising industry-leading brands such as LenelS2, Supra, and Onity, is an innovative leader in advanced access and security solutions. With about 1,200 employees operating in 33 countries, the business has made a name for itself in electronic locking systems and contactless mobile key solutions. The sale will enable the business to leverage its leading brands, innovative solutions, and strong partner relationships for continued growth and development.

Carrier Chairman & CEO David Gitlin expressed his views on the transaction, noting the excellent prospects for Global Access Solutions under Honeywell’s ownership. “We look forward to watching its continued growth under the ownership of Honeywell,” Gitlin said. The sale is part of Carrier’s strategy to focus its growth and deliver superior shareholder value.

Carrier expects to receive net proceeds of approximately $4 billion from the transaction, intending to use these funds to pay down debt. The company also anticipates resuming share repurchases once its net leverage returns to around 2x EBITDA.

The Global Access Solutions business will be classified as “held for sale” on Carrier’s balance sheet starting in the fourth quarter of 2023. However, its results will remain in continuing operations until the sale is finalized.

Subject to regulatory approvals and customary closing conditions, the proposed sale is expected to close before the end of Q3 2024. Financial advisors Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC, along with legal counsel from Paul, Weiss, Rifkind, Wharton & Garrison LLP and Linklaters LLP, played critical roles in facilitating this significant deal.

This acquisition by Honeywell not only underscores the dynamism of the technology and security solutions sector but also highlights the strategic moves companies are making to refine their focus and enhance their market positions. As the industry evolves with new technologies and market demands, such transactions are pivotal in shaping the future landscape of global security solutions.