US conglomerate 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.
LNG equipment specialist Air Products and Honeywell revealed the move in a statement on Wednesday saying the deal represents about 13x estimated 2024 Ebitda.
As a result of the acquisition, Honeywell will be able to offer customers a comprehensive solution which includes natural gas pre-treatment and liquefaction, utilizing digital automation technologies unified under the Honeywell Forge and Experion platforms, the statement said.
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.
The company’s 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.
“Highly complementary acquisition”
This is the fourth acquisition Honeywell has announced this year as part of its capital deployment strategy.
Vimal Kapur, Chairman and CEO of Honeywell said “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.”
Air Products’ chairman and CEO, Seifi Ghasem, said 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,” he said.