Honeywell to acquire Air Products’ LNG Technology and Equipment to expand energy transition
Honeywell and Air Products announced today that Honeywell will acquire Air Products’ liquefied natural gas process technology and equipment business for $1.81 billion in an all-cash transaction, representing approximately 13x the estimated 2024 EBITDA.
This acquisition will enable Honeywell to offer a comprehensive solution for managing energy transformation, including natural gas pre-treatment and state-of-the-art liquefaction, utilising digital automation technologies unified under the Honeywell Forge and Experion platforms. This full-service solution aims to provide efficient, reliable, and optimised management of natural gas assets.
A completed LNG heat exchanger manufactured at Air Products’ Port Manatee facility is being loaded on a carrier at the Port of Manatee for shipment to the customer.
Currently, Honeywell provides pre-treatment solutions for LNG customers globally. Air Products’ complementary LNG process technology and equipment business includes in-house design and manufacturing of coil-wound heat exchangers and related equipment. CWHEs are known for their high throughput, small footprint, and robust, reliable, and safe operations both onshore and offshore.
“While the world continues to build the renewables-based energy infrastructure of the future, natural gas is a critical lower-emission and affordable transition fuel that will help meet ever-increasing and dynamic global energy demands,” said Vimal Kapur, chairman and CEO of Honeywell. “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, president, and CEO Seifi Ghasemi stated, “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 market has quadrupled over the past 20 years and is expected to double over the next two decades, driven by demand in key end markets, including power and data centers.
Ken West, president and CEO of Honeywell’s Energy and Sustainability Solutions segment, added, “The integration of this talented team and the acquired proprietary technologies will enable Honeywell UOP to bring a full spectrum of scalable solutions and services that help our global customers navigate the complex journey to more sustainable and efficient energy practices.”
Air Products’ LNG Business employs approximately 475 people with headquarters in Allentown, Pennsylvania, and a 390,000-square-foot manufacturing facility in Port Manatee, Florida.
This transaction is the fourth acquisition Honeywell has announced this year as part of its disciplined capital deployment strategy. The company focuses on high-return acquisitions to drive future growth across its portfolio, aligned with the three compelling megatrends of automation, the future of aviation, and energy transition.
The transaction, expected to be adjusted earnings per share accretive in the first full year of ownership, is not subject to any financing conditions and is anticipated to close before the end of the calendar year, subject to customary closing conditions, including receipt of certain regulatory approvals.
For more information visit www.honeywell.com
11 July 2024
