Honeywell and Air Products jointly announced that Honeywell has agreed to acquire Air Products’ liquefied natural gas (LNG) process technology and equipment business for $1.81 billion in an all-cash transaction. This represents approximately 13x the estimated 2024 EBITDA.
Through this acquisition, Honeywell will be able to offer customers a comprehensive, top-tier solution for managing their energy transformation journey. And the new holistic offering will encompass natural gas pre-treatment and state-of-the-art liquefaction, utilizing digital automation technologies unified under the Honeywell Forge and Experion platforms. This solution will enable efficient, reliable and optimized management of natural gas assets, delivering unparalleled value and support.
Honeywell currently provides a pre-treatment solution serving LNG customers globally. Air Products’ complementary LNG process technology and equipment business consists of a comprehensive portfolio, including in-house design and manufacturing of coil-wound heat exchangers (CWHE) and related equipment. And CWHEs offers the highest throughput of natural gas in a single exchanger with a small footprint and robust, reliable and safe operations both onshore and offshore.
The LNG market significantly increased in the past couple of decades and it is expected to double over the next two decades. This is largely being driven by demand in key markets like power and data centers.
Air Products’ LNG Business has about 475 employees with headquarters in Allentown, Pennsylvania and a 390,000-square-foot manufacturing facility in Port Manatee, Florida, where all sizes of CWHEs are made.
This is Honeywell’s fourth acquisition announced this year as part of its disciplined capital deployment strategy. And the company is focused on high-return acquisitions that will drive future growth across its portfolio, which is aligned with the three megatrends of automation, the future of aviation and energy transition.
This deal, which is expected to be adjusted earnings per share accretive in the first full year of ownership is not subject to any financing conditions and is expected to close before the end of the calendar year, subject to customary closing conditions, including receipt of certain regulatory approvals.
KEY QUOTES:
“While the world continues to build the renewables-based energy infrastructure of the future, natural gas is a critical lower-emission and affordable transition fuel that will help meet ever-increasing and dynamic global energy demands.”
“This highly complementary acquisition will further strengthen our energy transition portfolio, and Air Products’ CWHE technology will immediately expand our installed base – creating new opportunities to compound growth in aftermarket services and digitalization through our Honeywell Forge platform.”
– Vimal Kapur, Chairman and CEO of Honeywell
“The decision to divest our LNG heat exchanger technology and equipment business reflects Air Products’ continued focus on its two-pillar strategy — to grow our core industrial gas business and related technology and equipment, and to be a first-mover delivering clean hydrogen at scale to decarbonize industrial and heavy-duty transportation sectors. The LNG business is a great business and at its strongest point in its decades-long history thanks to the outstanding work of our people, and they will be in good hands to advance as part of Honeywell’s related portfolio of technologies.”
– Air Products’ Chairman, President and Chief Executive Officer Seifi Ghasemi
“The integration of this talented team and the acquired proprietary technologies will enable Honeywell UOP to bring a full spectrum of scalable solutions and services that help our global customers navigate the complex journey to more sustainable and efficient energy practices.”
– Ken West, President and CEO of Honeywell’s Energy and Sustainability Solutions (ESS) segment
