Honeywell (HON) announced on Friday that it will sell its Personal Protective Equipment (PPE) business to Protective Industrial Products (PIP), a portfolio company of Odyssey Investment Partners, for $1.3 billion in an all-cash deal. The industrial automation giant expects the sale to close in the first half of next year.
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As part of the transaction, the PPE business, which has a diverse product portfolio, employs around 5,000 people and boasts a streamlined manufacturing and distribution network. This business operates 20 manufacturing sites and 17 distribution centers across the U.S., Mexico, Europe, North Africa, Asia-Pacific, and China.
HON’s Management Comments on the Deal
Vimal Kapur, Chairman and CEO of Honeywell, commented, “Now with this transaction, the business will be positioned to accelerate its growth trajectory as it benefits from Odyssey’s historic investing in the PPE sector and scaling similar businesses to expand into new products, geographies, and end markets.”
Why Is Honeywell Selling Its PPE Business?
The sale of the PPE business is part of the company’s broader strategy to optimize its business portfolio by divesting non-core assets and reinvesting in high-return opportunities aligned with its focus on three transformative megatrends. As part of this strategy, Honeywell has completed four strategic acquisitions in the past year while also planning the spinoff of its Advanced Materials business into an independent, publicly traded entity by late 2025 or early 2026.
Notably, the divestiture also reflects external pressures. The divestiture of the PPE business follows a $5 billion stake in the company by activist investor Elliott Investment Management. The investment fund had recently called for a splitting up of the company’s businesses.
Is Honeywell a Good Stock to Buy?
Analysts remain cautiously optimistic about HON stock, with a Moderate Buy consensus rating based on eight Buys and 10 Holds. Over the past year, HON has increased by more than 15%, and the average HON price target of $240.59 implies an upside potential of 6.4% from current levels.
