KBR Moves to Buy Honeywell’s Government Services Business
[Via Satellite 08-15-2016] KBR has entered into a definitive agreement to acquire Honeywell Technology Solutions, Inc. (HTSI), the government services arm of Honeywell, with unanimous approval by the KBR board of directors. The transaction is expected to close by the end of October 2016, subject to regulatory approvals and customary closing conditions.
HTSI is headquartered in Columbia, Maryland, and has approximately 3,550 employees operating primarily in the U.S., the Middle East and Asia. Through its three business lines — space, mission support, and security solutions — the company offers services throughout the satellite mission lifecycle, military equipment prepositioning and logistics services, and cybersecurity capabilities to protect customers’ digital information and physical security. HTSI’s primary customers include NASA, the U.S. Department of Defense, and the U.S. intelligence community.
HTSI will be integrated into KBRwyle, a wholly owned subsidiary of KBR, to create a total capability government services organization that spans the spectrum of the lifecycle of aerospace and defense programs from research and development, through test and evaluation, to operations, maintenance, and field logistics.
Annual estimated revenues for HTSI are approximately $600 million. KBR expects the transaction will be accretive to its earnings per share in 2017. 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 intends to fund the transaction initially through its existing line of credit facility.