Honeywell recently agreed to acquire Air Products’ liquefied natural gas (LNG) process technology and equipment business for $1.81 billion in an all-cash transaction.
The transaction is expected to close before the end of the calendar year, Honeywell reported.
As a result of the acquisition, Honeywell expects to offer customers a comprehensive solution for managing their energy transformation. The new offering will encompass natural gas pre-treatment and liquefaction, utilizing digital automation technologies unified under the Honeywell Forge and Experion platforms.
This full-service solution will enable efficient, reliable, and optimized management of natural gas assets, the company maintained.
“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,” Vimal Kapur, Honeywell chairman and CEO, said in a news release.
“This highly complementary acquisition will further strengthen our energy transition portfolio, and Air Products’ CWHE technology will immediately expand our installed base, creating new opportunities to compound growth in aftermarket services and digitalization through our Honeywell Forge platform.”
Currently, Honeywell provides a pre-treatment solution serving LNG customers globally. Air Products’ complementary LNG process technology and equipment business includes in-house design and manufacturing of coil-wound heat exchangers (CWHE) and related equipment. CWHEs provide the highest throughput of natural gas in a single exchanger with a small footprint and robust, reliable, and safe operations both onshore and offshore.
“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 Seifi Ghasemi, Air Products chairman, president, and CEO.
“The LNG business is a great business and at its strongest point in its decades-long history thanks to the outstanding work of our people, and they will be in good hands to advance as part of Honeywell’s related portfolio of technologies.”
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.
“The integration of this talented team and the acquired proprietary technologies will enable Honeywell UOP to bring a full spectrum of scalable solutions and services that help our global customers navigate the complex journey to more sustainable and efficient energy practices,” said Ken West, president and CEO of Honeywell’s energy and sustainability solutions segment.
Air Products’ LNG Business includes approximately 475 employees with headquarters in Allentown, Pennsylvania, and a 390,000-sq.-ft. 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.