Honeywell has announced that Rank Group, a private investment company, will acquire its automotive Consumer Products Group (CPG) business in a cash transaction valued at approximately US$950 million.
The CPG business, which is headquartered in Danbury, CT and has more than 2,000 employees, includes four leading consumer automotive brands: Fram filters, Prestone antifreeze, Autolite spark plugs, and Holts car care products.
Rank Group is a New Zealand-based private company which invests across a variety of industries and aims to build and grow leading global businesses, including Reynolds Group Holdings, one of the largest packaging companies in the world.
The transaction is subject to regulatory approval and customary closing conditions and is expected to close in the third quarter of 2011. Upon regulatory approval, the company expects to account for CPG as Discontinued Operations. The company’s 2011 EPS guidance excludes the anticipated book gain on the sale of CPG, which it expects to utilize for repositioning and 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.
Currently reported within Honeywell’s Transportation Systems segment, the CPG business had 2010 sales of approximately US$1 billion. 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.
Dave Cote, chairman and chief executive officer of Honeywell, said “We are pleased to announce the sale of CPG to Rank Group. While CPG is a good business, it doesn’t fit with our portfolio of differentiated, global technologies. We are confident that 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 favorable macro trends of increased fuel economy and lower emission requirements around the world. Smart deployment of CPG sale proceeds, combined with the strong growth outlook for Transportation Systems, will deliver terrific long-term value to our customers and shareholders.”
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