KBR acquires Honeywell Technology Solutions Inc.
NewsAugust 12, 2016
MORRIS PLAINS, N.J. KBR Inc. will acquire Honeywell Technology Solutions Inc. (HTSI) for approximately $300 million. Officials expect to close this transaction in 2016 after it?s subject to customary closing conditions and required regulatory approvals.
“Honeywell continues to evaluate its portfolio while focusing on driving breakthrough growth through advanced software capabilities and technology differentiation,” says Honeywell Chairman and CEO Dave Cote. “As part of this process, we determined that HTSI did not align to our current portfolio and long-term strategic plans in Aerospace. HTSI is a good business with a long heritage in the government services industry, and is well positioned to continue this success as part of KBR.”
HTSI’s – a wholly owned subsidiary of Honeywell Aerospace – customers primarily consist of U.S. government agencies, including the Department of Defense (DoD).
Annual revenues for HTSI are an estimated $600 million. The transaction price to KBR is $266 million, after adjustments for approximately $34 million of acquired tax benefits, and subject to other customary adjustments, including for net working capital of HTSI. KBR officials say, the transaction will initially be funded through KBR's existing line of credit facility.
HTSI will be absorbed into KBRwyle, a KBR subsidiary, to create an organization that spans the spectrum of the life-cycle of aerospace and defense programs ranging from research and development (R&D) to test and evaluation, operations, maintenance, and field logistics, including cybersecurity and IT capabilities.
Stuart Bradie, President and CEO of KBR, Inc. says, "This acquisition is in-line with our previously announced strategy to expand our government service offerings into higher end technical services that tend to carry increased margins and reduced levels of risk."
