Featured Company News - Honeywell Announces Spin Off of Homes and ADI Distribution Business Units and Transportation Systems for End of 2018
ACCESS Newswire
LONDON, UK / ACCESSWIRE / October 12, 2017 / Pro-Trader Daily takes a look at the latest corporate events and news making the headlines for Honeywell International Inc. (NYSE: HON) ("Honeywell"), following which we have published a free report that can be viewed by signing up at http://protraderdaily.com/optin/?symbol=HON. The Company announced on October 10, 2017, that it intends to spin off its Homes Product Portfolio and its ADI Global Distribution business, as well as its Transportation Systems business, into two stand-alone, separate publicly-traded Companies by the end of 2018. For immediate access to our complimentary reports, including today's coverage, register for free now at:
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Spun Businesses Consist of High-Growth Businesses in Six Attractive Industrial End Markets; Better Positioned to Maximize Shareowner Value
Darius Adamczyk, President and Chief Executive Officer (CEO) of Honeywell, stated that the announcement marks the culmination of a rigorous portfolio review involving a detailed assessment of every Honeywell business, and analyzing numerous criteria including growth outlook, financial performance, market dynamics, potential for disruption, and assessment of fit as a Honeywell business.
Adamczyk added that the remaining Honeywell portfolio will consist of high-growth businesses in six attractive industrial end markets, each aligned to global megatrends including energy efficiency, infrastructure investment, urbanization, and safety. The simplified portfolio will offer multiple platforms for organic growth and margin expansion through the further deployment of the Company's world-class HOS Gold operating system and the Honeywell Sentience Platform. The spun businesses will be better positioned to maximize shareowner value through focused strategic decision making and capital allocation tailored for their end markets.
Transaction Details
The planned separation transactions are expected to be tax-free spins to Honeywell's shareowners for US federal income tax purposes.
The spin-off will not require a shareowner vote, but will be subject to finalization of the contours of the spun-off business, finalization of the capital structure of the three corporations, and the effectiveness of appropriate filings with the US Securities and Exchange Commission.
The transaction will also be subject to final approval of the Honeywell's Board of Directors, and other customary matters.
The two businesses together are worth $7.5 billion in annualized sale, with the new Homes and Global Distribution business likely to have annualized revenue of approximately $4.5 billion, and the new Transportation systems business expected to have annualized revenue of approximately $3 billion.
The Company intends to keep its aerospace holdings.
Honeywell's Smart Energy business unit, previously part of HBT, will be integrated into the Process Solutions unit within Honeywell Performance Materials and Technologies.
New Transportation Systems Business
The business will be a global leader in turbocharger technologies with best-in-class engineering capabilities for a broad range of engine types across global automobile, truck, and other vehicle markets. The business is likely to have a high-yield credit rating, 6,500 employees, and financial responsibility for Honeywell's legacy automotive segment liabilities in an amount equal to its Bendix legacy asbestos liability.
New Homes and Global Distribution Business
The business will be a leader in the home heating, ventilation, and air conditioning (HVAC) controls and security markets, and a leading global distributor of security and fire protection products. The business is likely to have a high-yield credit rating, 13,000 employees, and along with financial responsibility for certain Honeywell legacy liabilities.
Leadership
Gary Michel has been appointed to serve as the new President and CEO of Honeywell's Home and Building Technologies (HBT) strategic business group. He will serve as Company Officer, succeeding Terrence Hahn, and will report to Adamczyk. Terrence Hahn will help prepare the Homes and ADI businesses for the spin off and will also report to Adamczyk. The leadership changes will be effective immediately.
About Honeywell International Inc.
Founded in 1906, Honeywell invents and manufactures technologies that address some of the world's most critical challenges around energy, safety, security, productivity, and global urbanization. The Company is headquartered in Morris Plains, New Jersey.
Last Close Stock Review
At the closing bell, on Wednesday, October 11, 2017, Honeywell Intl.'s stock marginally dropped 0.41%, ending the trading session at $142.72. A total volume of 3.22 million shares have exchanged hands, which was higher than the 3-month average volume of 2.60 million shares. The Company's stock price soared 5.46% in the last three months, 15.89% in the past six months, and 34.92% in the previous twelve months. Moreover, the stock surged 23.19% since the start of the year. The stock is trading at a PE ratio of 22.12 and has a dividend yield of 2.09%. The stock currently has a market cap of $109.07 billion.
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