Charlotte, North Carolina-based industrial manufacturing conglomerate Honeywell has agreed to acquire Compressor Controls Corporation (CCC) from newly formed diversified industrial manufacturer Indicor for $670 million in an all-cash transaction, the company announced April 26. The purchase price represents roughly 15 times CCC’s estimated 2023 EBITDA on a tax adjusted basis, according to a news release.
Based in Des Moines, Iowa, CCC is a distributor of turbo-machinery control and optimization solutions, including control hardware, software and services. CCC primarily serves the liquified natural gas, gas processing, refining and petrochemical industries.
Former Honeywell executive Doug Wright became Indicor’s CEO and a member of its Board of Directors on April 1.
CCC will be integrated into Honeywell’s Process Solutions business, which includes Honeywell’s industrial control and automation technologies, according to the release.
“Compressor Control Corporation is an ideal complement to our process solutions portfolio, as it brings an installed base of greater than 14,000 control applications to our portfolio and will enable us to accelerate growth in combination with Forge’s industry leading APM capability,” Honeywell Performance Materials and Technologies President and CEO Lucian Boldea said in the release. “By enhancing our digitalization portfolio, we are helping customers accelerate their energy transitions through new controls and automation that, for example, can help with carbon capture and sequestration.”
The transaction is expected to close in the second half of 2023, subject to customary closing conditions, according to the release. CCC’s EBITDA margins are accretive to Honeywell, and Honeywell is expected to achieve a cash-basis return on investment of more than 15% by the fifth year that CCC is part of Honeywell.
CCC is currently a portfolio company of Charlotte-based industrial machinery manufacturer Indicor, which is privately owned by funds managed by Clayton, Dubilier & Rice and Roper Technologies.
Honeywell also announced its first-quarter financial results on April 27, reporting sales of $8.9 billion, up 6% year-over-year. Organic sales increased by 8%, while operating margin grew 390 basis points to 19.1%. Honeywell had year-over-year sales increases in each of the following business segments:
- Aerospace sales (up 14%)
- Honeywell Building Technologies sales (up 9%)
- Performance Materials and Technologies sales (up 15%)
After beating its guidance in all metrics in 1Q23, Honeywell has risen its full-year guidance for 2023 from 2-5% organic sales growth to 3-6%.