News

Carrier Global Sells Global Access Solutions Business to Honeywell

James L. Flint

• December 08, 2023

Carrier Global recently announced the sale of its Global Access Solutions business to Honeywell International for an impressive $4.95 billion. This move is part of Carrier's ongoing business transformation strategy, which has been well-received by investors. As a result, Carrier's shares experienced a 6.4% increase, reaching $56.28 during Friday's trading session.

In contrast, Honeywell's shares suffered a 2.6% decline, settling at $192.74. The broader market also experienced a minor setback, with the S&P 500 and Dow Jones Industrial Average decreasing by approximately 0.3% and 0.2% respectively.

The Global Access Solutions business, a division of Carrier's Fire and Security segment, specializes in providing cutting-edge technology to safeguard homes and businesses. In 2022 alone, this segment recorded sales amounting to around $3.6 billion. Overall, Carrier generated an impressive $20.4 billion in sales that same year.

Investors have shown a favorable response to this deal, resulting in a significant boost to Carrier's market capitalization by approximately $2.4 billion while simultaneously subtracting $3.4 billion from Honeywell's value.

One of the key driving factors behind this investor satisfaction is Carrier's valuation. They estimate that the $5 billion price tag represents a value that is about 17 times their projected earnings before interest, taxes, depreciation, and amortization (EBITDA) for 2023. Comparatively, Carrier's current trading multiple for 2023 EBITDA is roughly 13 times, according to FactSet data. In contrast, Honeywell trades at approximately 15 times this measure.

Honeywell's decision to pay a premium for this acquisition is influenced by the potential cost savings and synergies that can be achieved by integrating the Global Access Solutions business into their existing commercial building technology operations.

Carrier's Strategic Move Towards HVAC

Carrier, a renowned company in the field of heating, ventilation, and air-conditioning (HVAC), has made a significant move that not only fetched them a solid price but also solidifies their position as a pure play in the HVAC industry.

According to Carrier CEO David Gitlin, this transaction, along with their planned exits from various businesses including Industrial Fire, Residential and Commercial Fire, and Commercial Refrigeration cabinet enterprises, will greatly accelerate their growth strategy and focus. Gitlin further added that this move positions Carrier to deliver higher growth and superior shareholder value, reinforcing their track record of performing well while transforming.

It is worth mentioning that Carrier has been actively reshaping its business portfolio. In April, they acquired Viessmann Climate Solutions for approximately $13 billion. The proceeds from the Access sale will be utilized to pay down the debt incurred during the Viessmann deal.

Investors have responded positively to Carrier's strategic decisions. Over the past 12 months leading up to Friday's trading, Carrier stock has risen by an impressive 22%. On the other hand, Honeywell shares have experienced a 7% decline during the same period.