Honeywell to acquire CAES for $1.9B

Honeywell has agreed to acquire CAES Systems Holdings LLC (CAES) from private equity firm Advent International for approximately $1.9 billion in an all-cash transaction. This acquisition is expected to enhance Honeywell’s defense technology solutions across land, sea, air and space, including new electromagnetic defense solutions for end-to-end radio frequency (RF) signal management.

Headquartered in Arlington, Virginia, CAES (formerly known as Cobham Advanced Electronic Solutions) has 13 facilities in North America, including highly automated manufacturing facilities with fully automated test and tuning processes. The acquisition will add approximately 2,200 employees and a deep bench of RF engineering talent.

With CAES’ scalable offerings and Honeywell’s current defense and space portfolio, the combined company will grow Honeywell’s established production and upgrade positions on critical platforms including F-35, EA-18G, AMRAAM and GMLRS, while also introducing offerings on new platforms like Navy Radar (SPY-6) and uncrewed aerial systems (UAS) and counter-UAS (C-UAS) technologies. Based on current and anticipated demand, these programs are expected to grow significantly in the years to come, creating a favorable tailwind for revenue growth of Honeywell’s Aerospace Technologies business.

“This acquisition further positions Honeywell at the forefront of the defense industry’s most dynamic sectors and sets the tempo for continued growth across our aerospace business,” said Vimal Kapur, chairman and CEO of Honeywell. “With the integration of CAES’ solutions and capabilities, we will fortify our existing defense offerings, while also expanding our capabilities in pivotal areas like RF, radar, and sensing technologies, to ensure a market-leading position in areas that are critical for global security.”

“The combination of our talented teams will diversify and deepen our expertise and specialized capabilities that enable us to scale current offerings and innovate new ones across critical military platforms,” said Honeywell Aerospace Technologies President and CEO Jim Currier. “CAES’ trusted position with top U.S. defense customers strengthens our existing relationships as we shape the future of the defense industry together.”

“As a trusted supplier and mission partner to our customers across advanced RF capabilities, I couldn’t be more excited to see CAES join the Honeywell team and work together to build on the outstanding expertise of both companies,” said Mike Kahn, president and CEO of CAES. “Our extraordinary talent, RF breadth, and world-class manufacturing facilities will offer new opportunities and further drive innovation for our industry.”

“This transaction marks a significant milestone for both parties, and we are confident that the business will continue to thrive and grow,” said Shonnel Malani, managing partner at Advent International. “Under Advent International’s ownership, we have invested significantly in R&D, capital, and capability enhancement, all of which has been pursued to drive growth and the development of cutting-edge capabilities. We believe this sale to a strong strategic home will secure its long-term future."

This is the third acquisition Honeywell announced this year as part of its disciplined 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.

The CAES transaction is not subject to any financing conditions and is expected to close in the second half of 2024, subject to customary closing conditions, including receipt of regulatory approvals.