Industrial giant Honeywell on Thursday announced a $2 billion deal to expand its defense offerings. Honeywell stock is trading in a buy zone.
Charlotte, N.C.-based Honeywell agreed to buy electronics specialist CAES Systems Holdings from private equity firm Advent International for $1.9 billion in an all-cash transaction. Arlington, Va.- based CAES makes targeting and radar technologies for various missiles and defense vehicles, as well as antennas and other electronic components.
Honeywell said CAES' portfolio will expand its radio frequency (RF), radar and sensing technologies while diversifying its revenue streams. The acquisition also upgrades Honeywell's established inputs for defense programs including F-35 and EA-18G jets, as well as missile systems including Advanced Medium Range Air-to-Air (AMRAAM) missiles and the Guided Multiple Launch Rocket System (GMLRS).
Honeywell itself manufacturers an assortment of defense technologies, components and parts for nearly every type of military platform across land, air, sea and space.
The acquisition will add roughly 2,200 CAES employees and a "deep bench" of RF engineers to Honeywell. Originally founded in the U.K., CAES now has 13 facilities in North America, including highly-automated and fully-automated facilities.
Honeywell expects the deal to close in the second half of the year, subject to customary approvals and closing conditions. The transaction is expected to be adjusted EPS accretive in the first full year of ownership, Honeywell added.
Honeywell Stock Performance
HON stock rose 0.6% Thursday following the announcement.
Shares are trading low in a buy zone for a saucer-with-handle base, according to MarketSurge charts. Honeywell broke out above the 210.60 buy point on June 7.
Honeywell stock has not been a climber. Up only 2.1% so far this year, it has been lagging below record highs posted in August, 2021.
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