New Zealand-based private investment company Rank Group is to acquire Honeywell’s automotive Consumer Products Group (CPG) business in a cash transaction valued at around US$950m.
The transaction is subject to regulatory approval as well as customary closing conditions and is expected to close in the third quarter of 2011. Following regulatory approval, the company expects to account for CPG as discontinued operations.
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The company’s 2011 EPS guidance excludes the anticipated book gain on the sale of CPG, which it expects to use for repositioning and what it describes as “other actions.” The benefits of these actions, together with the deployment of divestiture proceeds, are expected to more than offset lost CPG earnings beyond 2011.
The CPG business, which is headquartered in Danbury, Connecticut and has more than 2,000 employees, includes four automotive brands: FRAM filters, Prestone antifreeze, Autolite spark plugs, and Holts car care products. Currently reported within Honeywell’s Transportation Systems segment, the CPG business had 2010 sales of around US$1bn.
Following the divestiture of CPG, Transportation Systems, which includes Honeywell’s global turbocharger and braking businesses, will continue to operate as one of Honeywell’s reported business segments.
“While CPG is a good business, it doesn’t fit with our portfolio of differentiated, global technologies,” said Honeywell chairman and CEO Dave Cote. “We are confident Rank Group, with its proven track record of investing in and building established franchises, will be a good home for CPG’s consumer brands, customers, and employees.
“We’re committed to our Transportation Systems segment and are confident in our leading technology position in the global turbocharger business, aligned with the favourable macro trends of increased fuel economy and lower emission requirements around the world.”
