Honeywell International announced that it will acquire Compressor Controls Corporation (CCC) for $670 million from private equity firm Clayton, Dubilier & Rice and Roper Technologies. The purchase price is approximately 15 times CCC’s estimated 2023 earnings before interest, taxes, depreciation, and amortization (EBITDA) of $44.7 million. Honeywell expects the acquisition to provide immediate earnings growth following its expected completion in the second half of 2023.
CCC, founded in 1974 and headquartered in Des Moines, Iowa, is a leading provider of advanced performance optimization solutions for turbo machinery, including gas and steam turbines, axial and centrifugal compressors, expanders, and pumps. The company has installed over 10,000 systems globally in industries such as oil and gas production, natural gas processing and liquefaction, power generation, air separation, and chemical manufacturing.
The acquisition will leverage Honeywell’s global footprint and enhance the synergies of both companies, offering customers a more comprehensive offering of integrated solutions covering a wide spectrum of applications across industries. Honeywell, a Fortune 100 technology company, provides products and solutions in aerospace, building technologies, performance materials, and safety and productivity.
The complementary nature of Honeywell and CCC’s portfolios will drive significant growth opportunities while capturing value through cost synergies. Honeywell’s extensive range of products and solutions, including its connected plant technologies, will provide CCC with access to additional segments and customers, expanding both companies’ capabilities and allowing them to offer a broader range of products and services to clients.
Honeywell’s acquisition of CCC is in line with its strategy to invest in complementary businesses that enhance its core offerings, expand its customer base, and create opportunities for growth. The company states that it focuses on acquiring businesses with differentiated products and solutions that support its long-term growth objectives, drive shareholder value creation, and enhance its financial flexibility.
The company anticipates a roughly 5% cash-basis return on its investment five years after the deal’s completion. The acquisition is expected to expand the products and services offered by Honeywell in the industrial control sector and increase its footprint in areas such as turbo machinery and natural gas applications.
Honeywell CEO Darius Adamczyk commented on the deal, stating, “Our acquisition of CCC is a strategic investment that will drive profitable growth for Honeywell and provide our customers with an even more comprehensive set of advanced technologies and services to help them optimize their operations and achieve better business outcomes.”
Adamczyk also highlighted the synergies between the two companies, adding, “CCC’s technology, products, and extensive installed base will complement Honeywell’s extensive portfolio, allowing us to offer our customers a more comprehensive suite of integrated solutions across a wide range of industries and applications.”
Compressor Controls Corporation’s acquisition is expected to strengthen Honeywell’s position as a leader in the industrial controls market, as the company benefits from CCC’s expansive global footprint and customer base. The two companies’ combined capabilities will create a stronger value proposition for customers and open opportunities for growth in multiple segments.
Honeywell International, with headquarters in Charlotte, North Carolina, is a global leader in providing innovative solutions across multiple industries, including aerospace, building technologies, performance materials, and safety and productivity. The company operates through four business segments: Aerospace, Building Technologies, Performance Materials and Technologies, and Safety and Productivity Solutions. Honeywell’s technologies, products, and solutions touch millions of people worldwide, improving the quality of life and contributing to a more sustainable world.
In conclusion, Honeywell International’s acquisition of Compressor Controls Corporation will significantly bolster its industrial control offerings and expand its customer base, providing both companies with a more comprehensive suite of integrated solutions across various industries and applications. The acquisition is in line with Honeywell’s strategic growth plan and is expected to drive significant value for shareholders and customers alike.
