Honeywell International Inc. HON has inked a deal to acquire Sundyne from private equity firm Warburg Pincus for $2.16 billion in cash. The deal value is equivalent to 14.5x 2024 EBITDA (tax-adjusted basis). 

Based in Arvada, CO, Sundyne is engaged in designing and manufacturing pumps and compressors for industries including energy, chemical and petrochemical as well as industrial sectors. The company currently employs 1,000 personnel.

Acquisition Rationale of Honeywell

The latest buyout is in sync with Honeywell’s policy of acquiring businesses to strengthen its business and expand its market share. The inclusion of Sundyne’s advanced products with Honeywell Forge technology will boost HON’s Energy and Sustainability Solutions (ESS) business. This acquisition will enable Honeywell to offer a comprehensive line of solutions in the pumps and compressors space for its customers

The acquisition will also create strategic growth opportunities in the process industries and expand Honeywell's global sales reach. Subject to regulatory approvals and customary closing conditions, the acquisition is expected to close by the second quarter of 2025. The company expects the buyout to be accretive to its sales, segment margin and adjusted earnings per share in the first full year of possession.

Other Notable Buyouts

Acquisitions are an essential aspect of Honeywell's growth strategy. In October 2024, the company closed the acquisition of Civitanavi Systems S.p.A. for about €200 million ($217 million) to boost its portfolio of aerospace navigation solutions. With the buyout, Honeywell expects to strengthen its foothold in the European Union. In September 2024, the company acquired CAES Systems Holdings LLC (“CAES”) from the private equity firm Advent. The transaction will augment its defense technology offerings across various domains, including land, sea, air and space.

Also, in the same month, the company acquired Air Products’ liquefied natural gas (LNG) process technology and equipment business for $1.81 billion. The inclusion of LNG process technology and equipment business expertise in in-house design and manufacturing of coil-wound heat exchangers and related equipment portfolio will boost Honeywell’s energy transition portfolio. 

In June 2024, the company acquired Carrier’s Global Access Solutions business for an all-cash deal of $4.95 billion. The inclusion of Global Access Solutions’ expertise in advanced access and security solutions, coupled with its impressive growth and margin profile, will enable Honeywell to expand its security products portfolio and boost its building automation segment.

Zacks Rank and Price Performance

Honeywell currently carries a Zacks Rank #4 (Sell). The stock has lost 7.4% in the year-to-date period compared with the industry’s 0.8% decline.

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Honeywell is plagued by weakness in the Industrial Automation segment due to persistent softness in the warehouse and workflow solutions businesses. The weakened demand for its products within the sensing and safety technologies business is also concerning.

Stocks to Consider

Better-ranked companies are discussed below.

Griffon Corporation GFF presently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

It delivered a trailing four-quarter average earnings surprise of 14.7%. In the past 60 days, the Zacks Consensus Estimate for GFF’s fiscal 2025 earnings has increased 0.7%.

RBC Bearings Incorporated RBC currently sports a Zacks Rank of 1. RBC delivered a trailing four-quarter average earnings surprise of 4.9%.

In the past 60 days, the Zacks Consensus Estimate for RBC’s fiscal 2025 earnings has increased 1.2%.

Enersys ENS presently sports a Zacks Rank of 1. The company delivered a trailing four-quarter average earnings surprise of 2.2%.

In the past 60 days, the consensus estimate for ENS’ fiscal 2025 earnings has increased 7.2%.

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