M&A Wrap: Honeywell Selling PPE Group for More Than $1.3 Billion
Honeywell International Inc. Chairman and CEO Vimal Kapur has taken another step to slim down the holding company, striking a deal late last week to dispose Honeywell’s personal protective equipment business to a competitor owned by a private-equity firm.
The proposed all-cash deal between Honeywell and Protective Industrial Products Inc. is worth a little more than $1.3 billion and comprises about 5,000 workers at 20 plans and 17 distribution centers in the United States, Mexico, Europe, North Africa and Asia. PIP leaders expect to complete their acquisition by mid-2025.
PIP was founded in 1984 by two families and is now owned by Odyssey Investment Partners, which invested in the company in late 2020—when PPE was a hot topic. Since then, the Albany, New York-based company has acquired eight other PPE ventures and built out its international presence, which the Honeywell acquisition will supercharge.
Kapur told investors recently he planned to sell Honeywell’s PPE business as part of an ongoing push to streamline the conglomerate around automation, aviation and energy transition work. To that end, he and his team last month announced they plan to spin off Honeywell’s advanced materials division into its own company.
More deals might be on their way: The leaders of Elliott Investment Management recently took a $5 billion stake in Honeywell and said they want a full separation of its aerospace and automation groups. Bagging $1.3 billion in cash from the PPE business might be handy in either funding such a split.
Investment Firm Buys CVG's Automation Unit
Staying in the automation space and with the theme of slimming down: Private investment firm Woodson Equity has acquired First Source Electronics, which sells control panels, electromechanical systems and cable assemblies, from Commercial Vehicle Group Inc. in a deal that could grow to be worth $3.5 million.
First Source markets primarily to the warehousing and industrial sectors and counts blue-chip names such as Walmart, UPS and Amazon among its customers. But the business had been struggling of late: In the first nine months of this year, it posted an operating loss of $3.5 million on sales of nearly $15 million—with that top line being half of its corresponding 2023 number—and CVG leaders decided its business no longer was a good strategic fit.
“In addition to their high-quality products, the exceptional talent within First Source Electronics distinguishes us in the marketplace,” Subir Shah, operations executive at Woodson Equity, said in a statement. “Our focus is to double down on the company’s expertise while building lasting partnerships with our customers.”
AIT Expands Its Fluid Power Presence in the Southeast
Cleveland-based Applied Industrial Technologies Inc. has agreed to pay about $270 million for one of the country’s largest distributors focused on fluid power and motion control systems, Hydradyne. The planned purchase will add nearly 500 people working from 33 sites across the Southeast to AIT’s team and give it more muscle to sell to clients working on reshoring, equipment modernization and electrification projects, among other things.
Applied President and CEO Neil Schrimsher and his team expect Dallas-headquartered Hydradyne to ring up about $260 million in sales and $30 million in EBITDA in its first year under AIT. That would add about 6% and 5%, respectively, to the company’s fiscal 2024 financials. And that’s not counting on cross-selling opportunities.
