Honeywell and Air Products jointly announced that Honeywell has agreed to acquire Air Products’ liquefied natural gas (LNG) processing technology and equipment business for $1.81 billion in an all-cash transaction.
This represents roughly 13 times estimated 2024 EBITDA.
This acquisition enables Honeywell to offer customers comprehensive, best-in-class solutions to manage their energy transformation initiatives. The new integrated offering includes natural gas pre-processing and state-of-the-art liquefaction, leveraging digital automation technologies integrated into the Honeywell Forge and Experion platforms. This full-service solution enables efficient, reliable and optimized management of natural gas assets while delivering unmatched value and support.
Today, Honeywell provides pre-processing solutions to LNG customers around the world. Air Products’ complementary LNG processing technologies and equipment business consists of a comprehensive portfolio that includes in-house design and manufacture of coil-wound heat exchangers (CWHE) and related equipment. CWHEs provide the highest natural gas processing capacity in a single exchanger with a small footprint, delivering robust, reliable and safe operation both onshore and offshore.
“As the world continues to build out the renewable energy-based energy infrastructure of the future, natural gas is a critical low-emission, affordable transition fuel to help meet the growing and dynamic global energy needs,” said Vimal Kapoor, Honeywell chairman and CEO.
“This highly complementary acquisition further strengthens our energy transition portfolio, with Air Products’ CWHE technology immediately expanding our installed base and creating new opportunities to accelerate the growth of aftermarket services and digitalization through the Honeywell Forge platform,” added Kapoor.
“The decision to sell our LNG heat exchanger technology and equipment business reflects Air Products’ continued focus on our two-pronged strategy of growing our core industrial gases business and related technologies and equipment, and pioneering the large-scale supply of clean hydrogen for the decarbonization of industrial and heavy transportation sectors,” said Seifi Ghassemi, Air Products’ chairman, president and chief executive officer. “The LNG business is a great business and is at the strongest point in its decades-old history thanks to the great work of our employees. They will move forward as part of Honeywell’s related technology portfolio.”
According to industry research, the LNG market has grown fourfold over the past 20 years and is expected to double over the next 20 years, driven by demand in key end markets such as power and data centers.1
“The integration of this talented team and the unique technologies we have acquired will enable Honeywell UOP to offer a broad range of scalable solutions and services to help customers around the world navigate their complex journey to more sustainable and efficient energy practices,” said Ken West, president and CEO of Honeywell’s Energy and Sustainability Solutions (ESS) division.
Air Products’ LNG business is headquartered in Allentown, Pennsylvania, and employs approximately 475 people. The company also has a 390,000 square foot manufacturing facility in Port Manatee, Florida, where CWHEs of all sizes are manufactured.
This is the fourth acquisition Honeywell has announced this year as part of its disciplined capital allocation strategy, as the company focuses on high-yield acquisitions that will drive future growth across its portfolio, aligned with three compelling megatrends: automation, the future of aviation and the energy transition.
The transaction, which is expected to be accretive to adjusted earnings per share in the first full year of ownership, is not subject to any financing conditions and is expected to close by calendar year end, subject to customary closing conditions, including receipt of certain regulatory approvals.
