Honeywell announced today that it has agreed to acquire CAES Systems Holdings LLC from private equity firm Advent International for approximately $1.9 billion in an all-cash transaction. This deal represents approximately 14 times the estimated 2024 EBITDA on a tax-adjusted basis.
This acquisition aims to enhance Honeywell’s defense technology solutions across land, sea, air, and space, introducing new electromagnetic defense solutions for comprehensive radio frequency signal management. The integration of CAES’ scalable offerings with Honeywell’s current defense and space portfolio will bolster Honeywell’s established positions on critical platforms such as the F-35, EA-18G, AMRAAM, and GMLRS. Additionally, it will introduce offerings on new platforms like Navy Radar and UAS and C-UAS technologies. These programs are anticipated to experience significant growth in the coming years, creating a favorable outlook for revenue growth in Honeywell’s Aerospace Technologies business.
“This acquisition further positions Honeywell at the forefront of the defense industry’s most dynamic sectors and sets the tempo for continued growth across our aerospace business,” said Vimal Kapur, chairman and CEO of Honeywell. “With the integration of CAES’ solutions and capabilities, we will fortify our existing defense offerings while also expanding our capabilities in pivotal areas like RF, radar, and sensing technologies, ensuring a market-leading position in areas critical for global security.”
Headquartered in Arlington, Va., CAES (formerly known as Cobham Advanced Electronic Solutions) operates 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 to Honeywell.
“The combination of our talented teams will diversify and deepen our expertise and specialized capabilities, enabling us to scale current offerings and innovate new ones across critical military platforms,” said Honeywell Aerospace Technologies president and CEO Jim Currier. “CAES’ trusted position with top U.S. defense customers strengthens our existing relationships as we shape the future of the defense industry together.”
Looking forward, Honeywell anticipates attractive opportunities to expand the combined solutions internationally, capitalizing on growth spaces with select defense customers.
“As a trusted supplier and mission partner to our customers across advanced RF capabilities, I couldn’t be more excited to see CAES join the Honeywell team and work together to build on the outstanding expertise of both companies,” said Mike Kahn, president and CEO of CAES. “Our extraordinary talent, RF breadth, and world-class manufacturing facilities will offer new opportunities and further drive innovation for our industry.”
“This transaction marks a significant milestone for both parties, and we are confident that the business will continue to thrive and grow,” said Shonnel Malani, managing partner at Advent International. “Under Advent International’s ownership, we have invested significantly in R&D, capital, and capability enhancement to drive growth and the development of cutting-edge capabilities. We believe this sale to a strong strategic home will secure its long-term future.”
This is the third acquisition Honeywell has announced this year as part of its disciplined capital deployment strategy, focusing on high-return acquisitions that will drive future growth across its portfolio, aligned with the three compelling megatrends of automation, the future of aviation, and energy transition.
The CAES transaction, 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 anticipated to close in the second half of 2024, subject to customary closing conditions, including receipt of certain regulatory approvals.
For more information visit www.honeywell.com
