Honeywell has agreed to acquire Air Products’ liquefied natural gas (LNG) process technology and equipment business for $1.81bn in an all-cash transaction, representing approximately 13x estimated 2024 EBITDA, according to a news release.
The new holistic offering will encompass natural gas pre-treatment and state-of-the-art liquefaction, utilizing digital automation technologies unified under the Honeywell Forge and Experion platforms.
Currently, Honeywell provides a pre-treatment solution serving LNG customers globally. Air Products’ complementary LNG process technology and equipment business consists of a comprehensive portfolio, including in-house design and manufacturing of coil-wound heat exchangers and related equipment.
“While the world continues to build the renewables-based energy infrastructure of the future, natural gas is a critical lower-emission and affordable transition fuel that will help meet ever-increasing and dynamic global energy demands,” said Vimal Kapur, Chairman and CEO of Honeywell.
“The decision to divest our LNG heat exchanger technology and equipment business reflects Air Products’ continued focus on its two-pillar strategy — to grow our core industrial gas business and related technology and equipment, and to be a first-mover delivering clean hydrogen at scale to decarbonize industrial and heavy-duty transportation sectors,” said Air Products’ Chairman, President and Chief Executive Officer Seifi Ghasemi.
The LNG market has quadrupled over the past 20 years and is expected to double over the next two decades, driven by demand in key end markets including power and data centers according to industry research.
Air Products’ LNG Business has approximately 475 employees with headquarters in Allentown, Pennsylvania and a 390,000-square-foot manufacturing facility in Port Manatee, Florida, where all sizes of CWHEs are made.
This is the fourth acquisition Honeywell has announced this year as part of its capital deployment strategy. The company is focused on high-return acquisitions that will drive future growth across its portfolio, which is aligned with the three compelling megatrends of automation, the future of aviation and energy transition.
