Dive Brief:
- Honeywell International is selling its personal protective equipment business for $1.3 billion to Protective Industrial Products, a portfolio under 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 sites across the U.S., Mexico, Europe, North Africa, Asia Pacific and China, according to the release.
- The pending deal includes Honeywell’s PPE brands such as Fendall, Fibre-Metal, Howard Leight and KCL, according to Protective Industrial Products’ press release. The sale is expected to close in the first half of 2025.
Dive Insight:
Honeywell’s divestiture of its PPE portfolio is part of the chemical and electronic maker’s plans to exit the protective equipment sector. In 2021, the company sold its industrial protective footwear to Rocky Brands for $230 million.
PPE sales decreased by $129 million in Q3 due to falling demand, according to a Honeywell securities filing.
“Over the last five years, our PPE business has experienced significant wins as a result of its operational improvement initiatives, footprint rationalization and quick adaptation to global needs following the pandemic,” Kapur said in the press release. “Now with this transaction, the business will be positioned to accelerate its growth trajectory as it benefits from Odyssey's historic investing in the PPE sector and scaling similar businesses to expand into new products, geographies and end markets.”
The divestiture is also part of Honeywell’s plans, announced in October 2023, to shift its focus to three major areas: automation, aviation technology and clean energy transition.
“This move will help us further strengthen our core business and will be creative to Honeywell's organic growth and margin rate,” Kapur said on the earnings call.
The company has made other portfolio moves to focus on the three major trends. In October, Honeywell announced it plans to spin off its advanced materials business into an independent, U.S.-traded public company. The spin-off process is expected to be completed in 2025 or 2026, according to the press release.
“If you see our actions on both Advanced Materials and PPE, they reflect that commitment,” Kapur said on the call. “I would say the PPE business in particular is going to have Honeywell accelerate organic growth and more advanced margin expansion. Advanced Material business is more of a neutral on an fixed basis.”
Honeywell also made many acquisitions in the past year with the goal of driving growth in these priority areas. The company completed the acquisitions of cloud-based service company Carrier Global Access Solutions, navigation technology company Civitanavi Systems, electronics company CAES and Air Products' liquified natural gas (LNG) business.
