Honeywell targets $2B-$4B automation acquisitions before aerospace spinoff

Honeywell is targeting acquisitions successful the $2 cardinal to $4 cardinal scope and sees its concern automation concern arsenic a cardinal country for deal-making, according to Reuters.

At Thursday's capitalist day, Industrial Automation portion president Peter Lau enactment the addressable marketplace for his part astatine astir $35 cardinal and told the assemblage that deal-making opportunities were plentiful — "a ton of accidental for M&A," helium said. The updated guidance tightens a anterior model that had stretched from $1 cardinal to $7 billion.

When investors raised the question of whether bigger deals mightiness beryllium backmost connected the table, CEO Vimal Kapur said circumstances could displacement but offered nary encouragement, stating the institution does not presently "see immoderate necessity to spell distant from our cardinal strategy." Before pursuing immoderate larger deals, Honeywell would archetypal enactment done obligations including paying down debt, reinvesting successful the business, and returning superior to shareholders, CFO Mike Stepniak said. "We volition beryllium thoughtful and volition beryllium patient. There is nary urgency," Stepniak said.

Ralliant, a shaper of precision instruments and sensors whose marketplace worth sits adjacent $7 billion, had drawn speculation from analysts arsenic a imaginable Honeywell target, but the caller woody ceiling puts it retired of reach. Ralliant occupies the aforesaid competitory abstraction arsenic measurement and instrumentation players similar Ametek, Teledyne, and Idex, Lau said.

The capitalist day, which Honeywell hosted successful New York City connected Thursday, was organized astir the forthcoming individuality of Honeywell Technologies, the automation-focused entity that volition stay aft the aerospace separation. The institution laid retired three-year fiscal targets, including 4% to 6% integrated growth, much than 60 ground points of yearly borderline expansion, and implicit 10% yearly net growth, the institution said.

Honeywell has spent years restructuring itself into a pure-play automation company, separating its precocious materials part into what is present known arsenic Solstice Advanced Materials past October and readying to rotation disconnected Honeywell Aerospace connected June 29. The institution has besides agreed to merchantability its Warehouse and Workflow Solutions portion and its Productivity Solutions and Services concern arsenic portion of the broader breakup. About $14 cardinal has flowed into astir a twelve deals implicit caller years, with the emblematic transaction landing determination betwixt $1 cardinal and $2 billion.

For Honeywell Technologies, the 2026 outlook calls for adjusted net betwixt $3.95 and $4.15 per stock and gross of $19.9 cardinal to $20.2 billion, the institution said.