It’s been a busy day for software-industrial company Honeywell International Inc. (NYSE:HON), after it announced the acquisition of cyber security firm Nextnine, while Executive Chairman David Cote shed some light on the state of the company’s aerospace division, which has been under review as part of a spinoff plan.
The company said it signed a definitive agreement to acquire privately held Nextnine, which provides security management solutions and technologies for industrial cyber security.
Honeywell believes that bringing Nextnine into the fold will improve its current cyber security technologies while also substantially increasing its Connected Plant cyber security customer base.
Nextnine and its ICS Shield technology protect industrial sites from cyber security attacks and allow for remote monitoring of assets.
The technology complements Honeywell’s extensive cyber security portfolio with a solution used across various industries in more than 6,200 sites worldwide.
Additionally, Nextnine’s security solutions will be a key enabler of Honeywell Connected Plant, which combines Honeywell’s industrial expertise, software and digital technologies to enhance reliability, profitability and security for customers.
“This acquisition shows our ongoing commitment to providing our customers with a comprehensive portfolio of cyber security solutions to protect and defend their industrial control systems and process control networks,” said Vimal Kapur, president of Honeywell Process Solutions.
Cote told Reuters in an interview that Honeywell’s aerospace unit, its largest with $14.75 billion in 2016 sales, has fared well and that the company is heavily invested in it.
In May, Honeywell said it would decide later this year whether to spin off the unit, a move that is supported by hedge fund investor Third Point LLC as it could generate over $20 billion in shareholder value.
In a separate interview with Bloomberg TV, Cote noted that the company’s shareholders are opposing calls for a spinoff, arguing that they may lose out on investments.
Aerospace “is a very long cycle business,” the executive said.
First Quarter Results
Honeywell earned $1.71 per share in the first quarter, up 10% on a yearly basis.
Sales, meanwhile, totaled $9.42 billion, which is flat on a reported basis and up over 2% on an organic basis.
Excluding sales and adjustments, the company now expects full-year earnings of between $6.90 and $7.10 per share, up 7% to 10%, given its performance in the quarter.
Key Shareholders, Brief Background
Honeywell delivers solutions for the aerospace and automotive industries; control technologies for buildings and homes; and performance materials worldwide.
Its largest shareholder as of the end of March is Vanguard Group Inc., which held 48.5 million shares valued at $6.05 billion.
BlackRock Inc. is another key stakeholder, which owned 43.8 million shares valued at $5.47 billion as of the end of the same period.