Honeywell International (HON) has agreed to sell its auto sensor products portfolio for $140 million to Sensata Technologies (ST). The transaction is expected to be completed in early 2011. The business line, a part of Honeywell’s Sensing and Control Unit, is not a core area of the company’s focus and is being sold to streamline operations.
Sensata Technologies is an industrial technology company that designs, manufactures and sells sensors and control equipment.
Honeywell’s attractive collection of businesses has the potential to earn consistent above-average returns. The company’s focus on working capital management, free cash flow generation and balance sheet strength remain positive attributes in the current weak environment.
The company is a global leader in refrigerants, aerosols and foam-insulation blowing agents used to replace ozone-depleting chlorofluorocarbons and hydrochlorofluorocarbons. The products also improve the energy efficiency of homes, appliances and commercial refrigeration systems.
The company’s proactive restructuring initiatives have positioned it to navigate better than many of its peers, but we are yet to see signs of stabilization in a number of its major end markets.
At Automation and Control Systems, the largest segment by revenue, industrial customers are delaying both capital and operating spending across a number of businesses, driven by a weakening demand.
Honeywell International Inc. is a diversified technology and manufacturing company, serving customers worldwide with aerospace products and services, control, sensing and security technologies for buildings, homes and industry, turbochargers, automotive products, specialty chemicals, electronic and advanced materials, process technology for refining and petrochemicals and energy efficient products and solutions for homes, business and transportation.
We currently have a Neutral recommendation on Honeywell International for the long term.
HONEYWELL INTL (HON): Free Stock Analysis Report
Zacks Investment Research
