International. Honeywell announced today the completion of the acquisition transaction, which closed at a final price of US $4,950 million.
The acquisition brings differentiated software capabilities by adding three brands to Honeywell's portfolio: Lenel S2, a leader in business and enterprise access solutions; Onity, which offers electronic locks, specifically access to the hospitality industry and mobile credentials; and Supra, which specializes in electronic lockboxes and cloud-based programming software.
Global Access Solutions' approximately 1,200 employees are now part of Honeywell. The transaction is expected to accrete adjusted earnings per share in the first full year of ownership.
Honeywell will also benefit from the business's attractive growth and margin profile, valuable software content and recurring revenue mix, with expected annual sales in excess of $1 billion when combined with Honeywell's existing security portfolio.
"As the world's security needs evolve toward a focus on protecting both people and critical assets, we see strong
growth prospects for our acquisition of Access Solutions," said Vimal Kapur, Honeywell's chief executive officer. "By leveraging our strong track record in delivering high-value building automation products, solutions and services globally, this acquisition creates an exciting opportunity for us to achieve faster growth and greater margin expansion, while generating better outcomes for our building automation customers."
Honeywell updates outlook for 2024
Beginning in the second quarter, Honeywell will exclude the impact of acquisition-related amortization expenses on intangible assets and other acquisition-related costs, including related tax effects, from segment earnings and adjusted earnings per share.
The company believes this shift provides investors with a more meaningful measure of their performance from period to period, aligns the measure with how management will evaluate performance internally, and makes it easier for investors to compare our performance to that of their peers.
Honeywell plans to provide historical non-GAAP financial data under this new basis to facilitate comparability when the company reports its second-quarter results in July 2024.
As a result of the closing of the acquisition, Honeywell has updated its guidance for full-year sales, segment margin and adjusted earnings per share (as amended). Sales for the full year are now expected to reach between $38.5 billion and $39.3 billion, including organic sales growth of 4% to 6%.
The segment margin is expected to be in the range of 23.8% to 24.1%, with segment margin expansion of 30 to 60 basis points. Moreover, adjusted earnings per share are expected to be in the range of $10.15 to $10.45. Also, operating cash flow is expected to be in the range of US$6.7 billion to US$7.1 billion with free cash flow of US$5.6 billion to US$6.0 billion.
Honeywell also updated its guidance for second-quarter sales, segment margin and adjusted earnings per share. Second-quarter sales are expected to be between $9.3 billion and $9.6 billion, with organic sales growth of 1% to 4%.
The segment's margin is expected to be 22.7% to 23.1%, down 40 basis points from the same period a year earlier. Adjusted earnings per share are expected to be in the range of $2.35 to $2.45, an increase of 2% to 7% compared to the prior year.
