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Diving brief:
- Honeywell International is selling its personal protective equipment business for $1.3 billion to Protective Industrial Products, a portfolio of private equity firm Odyssey Investment Partners, the company announced last month.
- The company’s PPE business has approximately 5,000 employees and operates 20 manufacturing facilities and 17 distribution locations in the United States, Mexico, Europe, North Africa, Asia Pacific and China, according to the release .
- The current deal includes Honeywell’s PPE brands such as Fendall, Fibre-Metal, Howard Leight and KCL, according to Press release Industrial Protective Products. The sale is expected to be finalized in the first half of 2025.
Dive overview:
Honeywell’s divestiture of its PPE portfolio is part of the chemical and electronics maker’s plans to exit the protective equipment business. In 2021, the company sold its industrial protective footwear to Rocky Brands for $230 million.
PPE sales have declined by $129 million in the 3rd quarter due to the drop in demand, according to a Honeywell securities filing.
“Over the past five years, our PPE business has seen significant gains as a result of its initiatives to improve operationally, streamline its footprint and quickly adapt to global needs following the pandemic,” Kapur said in the release press. “Now, through this transaction, the company will be able to accelerate its growth trajectory by benefiting from Odyssey’s historic investment in the PPE sector and the development of similar businesses to expand into new products , geographies and end markets.
The sale is also part of Honeywell’s plans, announced in October 2023to focus on three major areas: automation, aeronautical technology and the clean energy transition.
“This move will help us further strengthen our core business and will be creative for Honeywell’s organic growth and margin rate,” Kapur said during the earnings conference call.
The company has made further changes to its portfolio to focus on the three major trends. In October, Honeywell announced plans to split its advanced materials business into an independent public company listed in the United States. The spin-off process is expected to be completed in 2025 or 2026, according to the press release.
“If you see our actions on advanced materials and PPE, they reflect that commitment,” Kapur said on the call. “I would say that the PPE sector in particular will allow Honeywell to accelerate its organic growth and further expand its margins. The Advanced Materials business is fairly neutral on a fixed basis.
Honeywell has also made numerous acquisitions over the past year in an effort to drive growth in these priority areas. The company completed the acquisition of a cloud-based services company Global Access Solutions for Operators, navigation technology company Civitanavi Systems, electronics company CAES and Air Products’ liquefied natural gas (LNG) activity.