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By Nikki Cabus

Carrier Announces Agreement to Sell Global Access Solutions Business to Honeywell for $5 Billion

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Carrier Global Corporation (NYSE: CARR) entered into a definitive agreement to sell its security business, Global Access Solutions, which includes the industry-leading brands of LenelS2Supra and Onity, to Honeywell (NASDAQ: HON) for an enterprise value of $4.95 billion, which represents approximately 17x 2023 expected EBITDA.

Carrier Global Corporation, global leader in intelligent climate and energy solutions, is committed to creating solutions that matter for people and our planet for generations to come. From the beginning, the have led in inventing new technologies and entirely new industries. Today, Carrier continues to lead a world-class, diverse workforce.

With approximately 1,200 employees operating in 33 countries, Carrier’s Global Access Solutions business is an innovative global leader in advanced access and security solutions, electronic locking systems, and contactless mobile key solutions. This pending sale will allow the business to build on the strength of its leading brands, innovative solutions, strong partner relationships and high growth potential.

“Global Access Solutions is a great business with dedicated, customer-focused teams, and we look forward to watching its continued growth under the ownership of Honeywell,” said Carrier Chairman & CEO David Gitlin. “The transaction, together with the planned exits of our Industrial Fire, Residential and Commercial Fire, and Commercial Refrigeration cabinet businesses, will accelerate our growth strategy and focus, positioning Carrier to deliver higher growth and superior shareholder value and further reinforcing our track record of performing while transforming.”

Carrier expects net proceeds from the transaction to be approximately $4 billion and intends to use the proceeds to pay down debt. The company anticipates resuming share repurchases as soon as its net leverage returns to approximately 2x EBITDA. Carrier expects to classify the Global Access Solutions business as “held for sale” on the balance sheet, but the results will remain in continuing operations until the sale closes.

The proposed sale is subject to regulatory approvals and customary closing conditions. It is expected to close before the end of Q3 2024.

Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC are serving as financial advisor to Carrier. Paul, Weiss, Rifkind, Wharton & Garrison LLP and Linklaters LLP are providing external legal counsel.

The sale agreement is a successful first step in Carrier’s portfolio transformation.

By Nikki Cabus

Palm Beach County-based Carrier named a TIME World’s Best Company

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Carrier has been named to TIME’s inaugural World’s Best Companies 2023 list.
For the first time ever, TIME partnered with data and business intelligence platform Statista to rank the biggest tech companies around the world doing best for investors, employees, and the planet. TIME is recognizing the top performing companies globally based on employee satisfaction, revenue growth and sustainability.

“Being named to TIME’s World’s Best Companies list in its first year is a testament to Carrier’s exceptional employees and their commitment to delivering innovative, intelligent climate and energy solutions for our global customers,” said Carrier Chairman & CEO David Gitlin.

“Long-term secular trends are transforming our industry, and we are leaning in as an industry leader uniquely positioned to solve our customers’ most important challenges. The result has been a galvanized workforce focused on a compelling mission, a supportive customer base eager for solutions, and a positive impact on our planet for generations to come.”
The World’s Best Companies 2023 is a research project and comprehensive analysis conducted to identify the top 750 performing companies across the globe. The study was based on three primary dimensions: Employee Satisfaction, Revenue Growth, and Sustainability (ESG) and tapped into areas such as the company’s image, atmosphere, working conditions, salary and equality. Companies that demonstrated positive revenue growth from 2020 to 2022 were considered, and multiple key performance indicators such as sustainable solutions, people and communities were incorporated.
  • Employee Satisfaction was evaluated through global surveys involving approximately 150,000 participants from 58 countries. The assessment included both direct and indirect employer evaluations by verified employees.
  • Revenue Growth was assessed using Statista’s database. To qualify, companies needed to generate a minimum of US $100 million in 2022 and demonstrate positive growth from 2020 to 2022. Both relative and absolute growth metrics were considered.
  • Sustainability was evaluated using ESG data from Statista’s database and targeted research. Multiple Key Performance Indicators were used to create a comprehensive ESG index. These included carbon emissions intensity and reduction rate, Carbon Disclosure Project (CDP) rating, board gender diversity, existence of a human rights policy, and adherence to Global Reporting Initiative (GRI) guidelines.

As Carrier expands its portfolio of intelligent climate and energy solutions, it is accelerating the shift toward electrification, more connected technologies and environmentally responsible refrigerants. Carrier’s recently announced portfolio transformation with the acquisition of Viessmann Climate Solutions will position the company to better help customers reduce their carbon footprint and meet their sustainability goals by improving energy efficiency in buildings, in homes and across the cold chain.

Headquartered in Palm Beach Gardens, Carrier is a global leader in building and cold chain solutions innovating to address the needs of people and our planet. The company promotes the health and safety of indoor spaces where people live, work, learn and play, and help preserve, protect and extend the supply of food and medicine across the globe. Carrier is taking action to address climate change with our partners and customers.

To learn more about Carrier, visit www.corporate.carrier.com.

By Adam Elitzur

Carrier strengthens sustainability commitments in 2023 ESG report

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Carrier Global Corporation, a leading provider of heating, air conditioning and refrigeration solutions, headquartered in Palm Beach Gardens, Florida, recently released its 2023 Environmental, Social and Governance (ESG) Report detailing the company’s sustainability strategy and latest initiatives. 

The report outlines Carrier’s commitment to setting near and long-term emission reduction targets, including a goal of achieving net-zero greenhouse gas (GHG) emissions across its value chain by 2050. Since 2020, Carrier’s efficient products have enabled customers to avoid over 212 million metric tons of GHG emissions. The company is also targeting a reduction of its customers’ carbon footprint by more than 1 gigaton and carbon-neutral operations by 2030.

In the report, David Gitlin, Chairman & Chief Executive Officer, stated “Our planet is at a critical juncture. Climate change is causing irreparable damage to the environment, and the need to transition to renewable energy has never been greater. At Carrier, the purposeful transformation of our portfolio will create a true global climate champion that leverages innovative technology to make a meaningful impact on the world for generations to come.”

“I am proud of the progress we are making. Looking ahead, we strive to be a catalyst for positive and sustainable change as we innovate, empower our people and operate with integrity. As a world leader in intelligent climate and energy solutions, Carrier is proud to have a deeply positive impact on people and our planet.”

On environmental metrics, Carrier reduced its energy consumption by 25% and water withdrawal by 11% compared to 2021 levels. The company purchased 134,000 MWh of renewable energy credits for its North American electricity use and implemented energy efficiency projects at its facilities worldwide. One such project, led by NORESCO, a part of Carrier, is in use in Fullerton, California, reducing the city’s carbon footprint and enabling critical infrastructure upgrades. To date, NORESCO has guaranteed more than $5 billion in energy and operating cost savings at more than 10,000 facilities while reducing customer carbon dioxide emissions by more than 25 million metric tons – the equivalent of planting 1.4 million acres of forest.

Additionally, Carrier is driving progress on social initiatives like inclusion, diversity and community engagement. In 2022, the company increased its spending with diverse suppliers to $312 million, expanded Employee Resource Groups globally and continued partnerships with historically Black colleges and universities. Carrier contributed over $9.7 million to community organizations worldwide. 

Looking ahead, Carrier plans to continue implementing emissions reduction initiatives across its operations, including more on-site renewable energy projects, fleet electrification efforts, and refrigerant emission reduction programs. As Carrier evolves its portfolio towards climate-friendly solutions, its 2023 ESG Report highlights the importance of sustainability and social responsibility to the company’s overall vision and growth strategy. Carrier aims to lead its industry’s transition to a net-zero future.

View Carrier’s full 2023 ESG Report here. 

By Nikki Cabus

Carrier Announces portfolio transformation including acquisition of Viessmann Climate Solutions

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Carrier Global Corporation (NYSE: CARR) announced strategic actions that will transform the Company’s business portfolio and establish Carrier as a pure-play, global leader in intelligent climate and energy solutions.

Carrier will acquire Viessmann Climate Solutions, the largest segment of Viessmann Group, in a cash and stock transaction valued at €12 billion, subject to working capital and other adjustments. The value represents approximately 13X synergized projected 2023 EBITDA. A privately held company with a 106-year legacy of innovation, Viessmann Climate Solutions provides Carrier with an iconic, premium brand in the highest growth segment of the global heat pump and energy transition markets. In addition, Carrier announced plans to exit its Fire & Security and Commercial Refrigeration cabinet businesses.

“The acquisition of Viessmann Climate Solutions is a game-changing opportunity,” said Carrier Chairman & CEO David Gitlin.

“Climate change, sustainability requirements and geopolitical factors are driving an unprecedented energy transition in Europe. Accelerated by government regulations and incentives, the transition creates a significant, long-term growth opportunity. Viessmann Climate Solutions is uniquely positioned to capitalize on this opportunity with its premier brand, highly differentiated distribution channel and innovative product offerings.”

Gitlin continued, “With 70% of its business consisting of heat pumps and related accessories, solar PV, batteries and services, Viessmann Climate Solutions is a critical leader in Europe’s energy transition. We look forward to welcoming its 11,000 team members to the Carrier family and Max Viessmann, CEO of Viessmann to the Carrier Board of Directors at closing, which is expected around the end of 2023.”

“The Viessmann Climate Solutions acquisition and planned exit of Fire & Security and Commercial Refrigeration will further simplify our business portfolio and accelerate our strategy to establish Carrier as the global leader in intelligent climate and energy solutions,” continued Gitlin. “Recent strategic actions, including the Toshiba Carrier Corporation acquisition and the sale of Chubb, have aligned our company with the most significant megatrends impacting the heating and cooling industry, including managing climate change and delivering on net zero emissions targets. While Fire & Security and Commercial Refrigeration are great businesses with incredible, customer-focused teams, the planned exits sharpen the strategic focus Carrier has gained through its 2020 spin-off from United Technologies. With Viessmann Climate Solutions, we are positioning ourselves to be the global climate solutions champion, poised to deliver higher growth and superior shareowner value.”

Max Viessmann, CEO of Viessmann, said, “Our purpose is to create living spaces for generations to come. Carrier’s global reach, broad product portfolio, financial strength and shared commitment to sustainability will enable our Climate Solutions business to fully capitalize on our innovative, integrated solution offering and maximize our impact on Europe’s independent energy transition.”

“Following the closing of the transaction, the Viessmann Group will remain committed as a significant, long-term shareowner of Carrier, reflecting our family’s high confidence in the superior value to be created by this combination. Joining Carrier’s Board of Directors will enable me to work directly with Dave, my fellow directors and the Carrier team to realize the substantial potential of the combination of two iconic and market-leading companies.”

 

Strategic Benefits

  • Positions Carrier to lead in the rapid climate and energy transition in Europe, which is driving sustainable market growth. Geopolitical dynamics and the push for energy independence are driving European governments to promote and prioritize renewable and electric solutions for heating and cooling, which comprise approximately half of Europe’s residential energy requirements. European governments are actively promoting heat pumps and renewable solutions to address these challenges and have implemented a number of related regulations and incentive programs that are expected to result in a significant growth opportunity for key climate solutions. The $5 billion European heat pump segment, in which Viessmann Climate Solutions specializes, is expected to triple in size to $15 billion by 2027.
  • Adds the premier asset in the European climate transition market to Carrier’s portfolio with a proven track record and confidence of high, sustained growth. As the premier European climate solutions manufacturer, Viessmann’s iconic global brand commands premium pricing. Viessmann Climate Solutions also benefits from unique customer access with a direct-to-installer model that includes more than 75,000 installers in 25 countries. These differentiators, combined with its innovative product offerings, have resulted in a superior growth track record and profile. Sales and EBITDA* have grown over 15% on a compounded annual growth rate basis since 2020, with double-digit growth expected to continue through 2030. 2023 forecasted EBITDA* is approximately €0.7 billion on approximately €4 billion of sales.
  • Provides new capabilities that expand Carrier’s comprehensive renewable offerings and strengthen Carrier’s differentiated, digitally enabled lifecycle solutions. In addition to proprietary heat pump technology, Viessmann Climate Solutions offers renewable energy capabilities and home battery storage, as well as smart home system controls and applications that can all be integrated to drive energy efficiency, reliability and convenience. Viessmann Climate Solutions also has extensive digital offerings that expand Carrier’s subscription and aftermarket offerings. The combination creates the industry’s most comprehensive and differentiated suite of sustainable technologies and services, which Carrier plans to scale globally.
  • Transforms Carrier into a simpler, pure-play global leader in intelligent climate and energy solutions. The Viessmann Climate Solutions acquisition accelerates Carrier’s transformation into a global leader of intelligent climate and energy transition solutions. Viessmann Climate Solutions’ leadership position in Europe coupled with Toshiba and Giwee’s leadership positions in Asia and Carrier’s in the Americas provides the company with established leadership positions in all attractive segments in all major geographies. The planned exits from the Fire & Security and Commercial Refrigeration businesses will reduce operational complexity and sharpen focus. The outcome will be a Carrier with market-leading positions globally with a higher growth profile.

Viessmann Climate Solutions Transaction Details and Financial Benefits

Under the terms of the agreement, subject to working capital and other adjustments, Carrier will acquire Viessmann Climate Solutions for €12 billion, of which 80% will be in cash and 20% in Carrier common stock delivered to Viessmann Family Holdings.

Reflecting their confidence in Carrier’s growth and value creation, the Viessmann family has agreed to certain long-term lock-up provisions with respect to its equity ownership of Carrier common stock. Max Viessmann will join Carrier’s Board of Directors.

Carrier expects to fund the cash portion of the consideration through a combination of cash on hand and newly committed financing.

Carrier expects to maintain its investment grade credit rating at the close of the Viessmann Climate Solutions acquisition and return to its pre-transaction leverage profile within approximately two years. It also expects to resume share repurchases upon reaching its current leverage. The Company remains committed to a growing and sustainable dividend.

Financial benefits of the acquisition include:

  • Enhanced top-line and EBITDA* growth. The acquisition significantly enhances Carrier’s growth profile given Viessmann Climate Solutions’ expected continued double-digit sales growth. As a result, Carrier expects this acquisition to add more than 100 basis points to the Company’s revenue growth profile.
  • Acquisition accretive to adjusted EPS* by year two. The acquisition is expected to be modestly dilutive in 2024 to adjusted EPS*, accretive in 2025 and increasingly accretive thereafter. Free cash flow* yield is expected to be high-single-digits in year five.
  • Increases aftermarket and recurring revenue growth profile. Viessmann Climate Solutions has a large installed base serviced by more than 1,300 service and support personnel, which is projected to drive double-digit aftermarket growth. In addition to over 90,000 maintenance contracts, including subscription models, Viessmann Climate Solutions’ ViCare digital platform has over 500,000 connected devices that allow customers to use its products and services easily and effectively.
  • Meaningful synergies. Carrier anticipates approximately €200 million of run-rate cost synergies primarily from procurement and insourcing. The vast majority of the cost synergies will be realized by year three. Revenue synergies from cross-selling opportunities are expected to provide further upside.
  • Reduced complexity. Following the acquisition and business exits, Carrier will benefit from a simplified structure with a smaller footprint, fewer ERP systems, fewer legal entities, and fewer, yet more scalable, global businesses.

Listen to social media announcement here

Carrier Announces Agreement to Sell Global Access Solutions Business to Honeywell for $5 Billion
Palm Beach County-based Carrier named a TIME World’s Best Company
Carrier strengthens sustainability commitments in 2023 ESG report
Carrier Announces portfolio transformation including acquisition of Viessmann Climate Solutions