Honeywell to Acquire CAES Systems for $1.9, Strengthening Defense and Aerospace Capabilities

Insider Brief:

• Honeywell will acquire CAES Systems from Advent International for $1.9 billion in cash.
• The acquisition is expected to boost Honeywell’s position on critical defense platforms like the F-35 and AMRAAM, while also facilitating entry into new markets such as Navy Radar (SPY-6) and Unmanned Aerial Systems (UAS).
• This is Honeywell’s third strategic acquisition this year and is expected to be completed in the latter half of 2024, pending regulatory approvals, and is anticipated to positively impact Honeywell’s earnings in the first full year post-acquisition.

Honeywell has announced its decision to acquire CAES Systems from Advent International for $1.9 billion in cash. This move is set to significantly bolster Honeywell’s defense and aerospace technologies. CAES, formerly known as Cobham Advanced Electronic Solutions, will enhance Honeywell’s offerings across multiple domains, including land, sea, air, and space.

The acquisition aligns with Honeywell’s strategy to expand its defense technology capabilities, especially in radio frequency (RF) signal management. Honeywell’s Chairman and CEO, Vimal Kapur, noted the importance of this acquisition, stating that it positions Honeywell as a leader in key defense sectors. With the integration of CAES’ scalable solutions, Honeywell aims to reinforce its existing defense technologies and introduce new capabilities in RF and radar technologies.

CAES, headquartered in Arlington, Virginia, brings 13 facilities in North America and a workforce of approximately 2,200 employees. This addition will significantly enhance Honeywell’s engineering talent pool and manufacturing capabilities. The acquisition is expected to boost Honeywell’s position on critical defense platforms like the F-35 and AMRAAM, while also facilitating entry into new markets such as Navy Radar (SPY-6) and Unmanned Aerial Systems (UAS).

Mike Kahn, President and CEO of CAES, expressed optimism about joining Honeywell, underscoring the potential for innovation and growth through the combined resources of both companies. The acquisition is expected to bring significant opportunities for expansion in international markets, leveraging Honeywell’s extensive customer relationships and CAES’ advanced RF capabilities.

Advent International, the current owner of CAES, views the transaction as a crucial milestone that will secure CAES’s long-term future. Shonnel Malani, Managing Partner at Advent, noted that significant investments in research and development under their ownership have positioned CAES for continued growth and innovation.

This acquisition marks Honeywell’s third strategic purchase this year, reflecting its commitment to high-value acquisitions that align with its focus on automation, aviation advancements, and energy transition. The transaction is expected to be completed in the latter half of 2024, pending regulatory approvals, and is anticipated to positively impact Honeywell’s earnings in the first full year post-acquisition.