Honeywell (HON) announced its acquisition of manufacturing company Sundyne from private equity firm Warburg Pincus in a $2.16 billion all-cash deal. This acquisition aligns with Honeywell’s strategy to expand its industrial and energy-related businesses as the company continues reshaping its portfolio. HON stock declines 0.33% in pre-market trading.
Why Is Honeywell Buying Sundyne?
Sundyne specializes in manufacturing high-performance pumps and compressors used in industries like oil & gas, chemicals, and power generation. Its products are known for their efficiency and reliability, making them essential in industrial operations worldwide.
With this acquisition, Honeywell aims to strengthen its portfolio by adding specialized products that support the rising global demand for energy security. Moreover, Sundyne’s strong presence in refining, petrochemicals, liquefied natural gas, and clean and renewable fuels will enhance Honeywell’s Energy and Sustainability Solutions segment. Meanwhile, Sundyne will bring a strong recurring aftermarket revenue stream to Honeywell’s portfolio, enhancing its long-term growth and service offerings.
The acquisition also aligns with Honeywell’s ongoing business transformation, which includes the planned Aerospace Technologies separation and the spin-off of Advanced Materials.
What’s Next?
The acquisition is expected to be immediately accretive to Honeywell’s sales growth and segment margins, as well as to adjusted EPS in the first full year of ownership. The deal is expected to close in Q2 2025, subject to regulatory approvals. Once finalized, Sundyne will integrate into Honeywell’s Industrial Automation division.
Through multiple strategic actions, including acquisitions and the divestment of non-core assets, Honeywell is streamlining its portfolio. Consequently, the company remains on track to exceed its commitment of investing at least $25 billion by 2025 in high-return capital projects, dividends, share buybacks, and value-enhancing acquisitions.
Is Honeywell a Good Buy Now?
Overall, Wall Street has a Moderate Buy rating on HON stock, based on eight Buys and eight Holds assigned in the last three months. The average Honeywell share price target is $238.79, which implies a 12.63% upside from the current levels.
