Honeywell to Acquire Aerospace Firm CAES Systems for $1.9 Billion
Honeywell has announced its plan to purchase aerospace and defense technology company CAES Systems for $1.9 billion. The acquisition is being made from private equity firm Advent International to enhance Honeywell’s aerospace technologies unit. This all-cash deal is Honeywell's third acquisition this year.
Why is This Important?
The acquisition comes during a period when defense firms witness a significant uptick in orders due to ongoing conflicts, such as the Russian aggression against Ukraine and the war in Gaza. By acquiring CAES, Honeywell aims to strengthen and expand its defense technology solutions across land, sea, air, and space.
Statements from Honeywell
Honeywell Aerospace Technologies President and CEO Jim Currier believes the acquisition will bolster relationships with key U.S. defense customers. "CAES' trusted position with top U.S. defense customers strengthens our existing relationships," Currier said.
Honeywell’s Business Realignment
Honeywell restructured its business in October 2023 to focus on megatrends such as automation, aviation, and energy transition. The CAES acquisition will provide Honeywell with additional automated facilities and about 2,200 employees, many of whom are highly skilled engineers.
The Strategic Move
To spur growth, Honeywell has concentrated on mergers and acquisitions in recent years. This strategy has focused on strengthening high-performing segments while divesting units that don’t align with its growth objectives. The CAES deal, expected to finalize in the second half of 2024, is projected to contribute positively to Honeywell’s adjusted earnings per share in the first full year of ownership.
By absorbing CAES Systems, Honeywell aims to fortify its advancements in the defense sector and improve its footprint in the aerospace technology domain.
