Honeywell to Aquire CAES to Enhance Defense Technologies

Honeywell said that CAES' military platform will provide opportunities for international growth.

Honeywell office building in Houston, TX.
Honeywell office building in Houston, TX.

CHARLOTTE, N.C. -- Honeywell announced that it has agreed to acquire CAES Systems Holdings from private equity firm Advent International for approximately $1.9 billion in an all-cash transaction. This represents approximately 14x estimated 2024 EBITDA on a tax-adjusted basis.

This acquisition will enhance Honeywell's defense technology solutions across land, sea, air and space, including new electromagnetic defense solutions for end-to-end radio frequency (RF) signal management. With CAES' scalable offerings and Honeywell's current defense and space portfolio, the combined company will grow Honeywell's established production and upgrade positions on critical platforms that include F-35, EA-18G, AMRAAM and GMLRS, while also introducing offerings on new platforms like Navy Radar (SPY-6) and UAS and C-UAS technologies. Based on current and anticipated demand, these programs are expected to grow significantly in the years to come, creating a favorable tailwind for revenue growth of Honeywell's Aerospace Technologies business.

Headquartered in Arlington, Va., CAES (formerly known as Cobham Advanced Electronic Solutions) has 13 facilities in North America, including highly automated manufacturing facilities with fully automated test and tuning processes. The acquisition will add approximately 2,200 employees and a deep bench of RF engineering talent.

Looking ahead, Honeywell sees attractive opportunities to expand the combined solutions internationally, capitalizing on accretive growth spaces with select defense customers.

This is the third acquisition Honeywell announced this year as part of its disciplined capital deployment strategy. The company is focused on high-return acquisitions that will drive future growth across its portfolio, which is aligned with the three compelling megatrends of automation, the future of aviation and energy transition.

The CAES transaction, which is expected to be adjusted earnings per share accretive in the first full year of ownership, is not subject to any financing conditions and is expected to close in the second half of 2024, subject to customary closing conditions, including receipt of certain regulatory approvals.

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