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Honeywell International Inc. HON has been actively following its business transformation strategy that aims to unlock value for its shareholders. As part of the strategy, the company recently sold its Personal Protective Equipment (PPE) business to Protective Industrial Products, Inc. (“PIP”).
PIP, a portfolio company of Odyssey Investment Partners, is engaged in manufacturing and distributing PPE products globally. It’s worth noting that the transaction was valued at $1.325 billion and was carried out in cash.
The divestiture will enable Honeywell to focus more on its core businesses and realign its operating segments to three megatrends, which are automation, the future of aviation and energy transition. The company’s PPE divestment follows the sale of its Lifestyle and Performance Footwear business in 2021 and allows it to exit the PPE sector.
Concurrently, Honeywell declared its plan to acquire Johnson Matthey's Catalyst Technologies business unit for £1.8 billion in cash. Based in London, UK, the Catalyst Technologies business provides catalysts for the chemicals and energy industries with operations in the United States, Europe and India.
The inclusion of Johnson Matthey's Catalyst Technologies unit will enable HON to strengthen its UOP business and grow its installed base across the petrochemical and refining catalysts. The buyout will allow Honeywell to provide solutions for the production of low-emission fuels like sustainable aviation fuel, sustainable methanol, blue ammonia and blue hydrogen. HON will incorporate the Catalyst Technologies business into its Energy and Sustainability Solutions (ESS) segment.
Honeywell anticipates the buyout to be accretive to its earnings in the first year, strengthen the ESS segment’s growth potential and create cost synergies. Management expects the transaction to be completed in the first half of 2026, conditioned on the fulfillment of certain customary closing conditions.
Zacks Rank & Price Performance
Honeywell currently carries a Zacks Rank #3 (Hold). The company’s Aerospace segment is witnessing solid momentum, driven by strength in the defense business and growth in air transport flight hours. Strong demand across the commercial aviation aftermarket business is aiding the segment.
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In the past year, HON stock has gained 12% compared with the industry’s 7.9% growth.
However, weakness in the Process solutions business, due to lower demand for smart energy and thermal solutions, has been affecting the Industrial Automation segment's performance. Also, softness in the productivity solutions and services business, owing to lower demand in Europe, remains a concern.