SecurityWorldMarket

11/10/2017

Honeywell to spin off ADI distribution business

Morris Planes, NJ (USA)

After much hype and speculation this week by Reuters and the business pages of the press, Honeywell's comprehensive portfolio review shows that intends to separately spin off its Homes product portfolio and ADI global distribution business, as well as its Transportation Systems business, into two stand-alone, publicly-traded companies.  As a result of these changes, effective immediately, Gary Michel, after 32 years at Ingersall-Rand, is to serve as president and CEO of Honeywell’s Home and Building Technologies (HBT) strategic business group.

The planned separation transactions are intended to be tax-free spins to Honeywell shareowners for U.S. federal income tax purposes and are expected to be completed by the end of 2018.

“Today’s announcement marks the culmination of a rigorous portfolio review involving a detailed assessment of every Honeywell business. As part of that review, we analysed numerous criteria, including growth outlook, financial performance, market dynamics, potential for disruption, and, most importantly, assessment of fit as a Honeywell business,” said Honeywell President and CEO Darius Adamczyk.

“The remaining Honeywell portfolio will consist of high-growth businesses in six attractive industrial end markets, each aligned to global mega trends including energy efficiency, infrastructure investment, urbanisation and safety. These businesses are best positioned to leverage Honeywell synergies from our technologies, financial and business models, and talent. Our simplified portfolio will offer multiple platforms for organic growth and margin expansion through further deployment of our world-class HOS Gold operating system and the Honeywell Sentience Platform. Honeywell will also have multiple levers for continuing to execute an aggressive capital deployment strategy, including a vigorous and disciplined M&A programme.

“The spun businesses will be better positioned to maximize shareowner value through focused strategic decision making and capital allocation tailored for their end markets,” Adamczyk said. “At Honeywell, we will continue our track record of execution, delivering growth, margin expansion, and aggressive capital allocation for our shareowners.”

The new Homes and Global Distribution business will be a leader in the home heating, ventilation and air conditioning (HVAC) controls and security markets, and a leading global distributor of security and fire protection products. The business is expected to have annualised revenue of approximately $4.5 billion, a high-yield credit rating, approximately 13,000 employees, and financial responsibility for certain Honeywell legacy liabilities.

Effective immediately, Gary Michel will serve as president and CEO of Honeywell’s Home and Building Technologies (HBT) strategic business group. Michel will report to Adamczyk and serve as a company officer. Michel succeeds Terrence Hahn, who will move to a leadership role reporting to Adamczyk and will help prepare the Homes and ADI businesses for the spin.

Michel joins Honeywell from Ingersoll-Rand Company, where he has held a series of large leadership roles over the past 32 years. Most recently, he served as senior vice president and president, Residential HVAC and Supply, which he transformed to deliver substantial improvements in revenue and market share, operating income, commercialisation processes, and technology platforms. 

“Gary has proven himself to be an innovative and energetic leader with a deep understanding of his customers and end markets and the ability to translate this knowledge into technology-differentiated offerings that bring value to customers,” Adamczyk said. “Gary is a welcome addition to our team and will help Honeywell continue to be a leader in connected technologies, building on our great positions in growing industries.”


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