Honeywell acquires Air Products’s LNG tech/equipment business for US$1.8 bn
US conglomerate Honeywell announced that it would acquire Air Products’ liquefied natural gas (LNG) process technology and equipment business for US$1.81 billion in an all-cash deal, which is approximately 13 times the estimated 2024 Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA).
This marks Honeywell’s fourth acquisition this year, and acquiring this business will enable the company to offer a comprehensive solution for managing energy transformation.
Furthermore, Honeywell will expand its portfolio with LNG technologies such as heat exchangers and cryogenic equipment. Integrating APD’s LNG process technology into Honeywell’s portfolio will enhance the efficient, reliable, and optimised management of natural gas assets, it adds.
The LNG market has quadrupled over the past 20 years and is expected to double over the next two decades, driven by demand in key end markets including power and data centres according to industry research. It is estimated that global demand for LNG will rise by more than 50% by 2040.
The acquisition is expected to bolster Honeywell’s adjusted earnings per share in the first year and is anticipated to close by the end of this year.
Air Products’ LNG Business has approximately 475 employees with headquarters in Allentown, Pennsylvania and a 390,000-sq-ft manufacturing facility in Port Manatee, Florida, where all sizes of CWHEs are made.
“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,” said Vimal Kapur, Chairman/CEO of Honeywell.
North Carolina-based Honeywell has a market capitalisation of almost US$140 billion. The industrial conglomerate operates in industries ranging from energy to aerospace. Air Products, based in Allentown, Pennsylvania, has a market value of about US$57 billion.
Honeywell is actively pursuing acquisitions as part of its disciplined capital deployment strategy. Last month, the industrial conglomerate announced the acquisition of CAES Systems for US$1.9 billion. Additionally, the company completed the acquisition of Carrier Global Corporation’s Global Access Solutions business for US$4.95 billion.
Honeywell, which operates a plant in Baton Rouge, has taken steps to expand its Capital Region facilities over the last few years. In 2021, the company announced it was expanding its Baton Rouge facility to double the production capacity of Solstice ze, a supermarket refrigerant, and last year, it opened a new plant—its first large-scale manufacturing site for medical propellent Solstice Air.
