Honeywell (Nasdaq: HON) has announced its agreement to purchase Air Products’ (NYSE:APD) liquefied natural gas (LNG) process technology and equipment business for $1.81 billion in an all-cash deal.

The acquisition, representing approximately 13 times the estimated 2024 EBITDA, marks Honeywell’s fourth acquisition announcement this year.

The deal will enable Honeywell to offer a comprehensive solution for customers’ energy transformation needs, combining natural gas pre-treatment and advanced liquefaction with digital automation technologies under the Honeywell Forge and Experion platforms.

This integration aims to provide efficient and optimised management of natural gas assets.

Air Products’ LNG business brings a valuable portfolio to Honeywell, including in-house design and manufacturing of coil-wound heat exchangers (CWHE) and related equipment.

CWHEs are known for their high throughput of natural gas in a single exchanger, compact footprint, and robust operations both onshore and offshore.

Vimal Kapur, Chairman and CEO of Honeywell, emphasised the importance of natural gas as a transition fuel, stating: “While the world continues to build the renewables-based energy infrastructure of the future, natural gas is a critical lower-emission and affordable transition fuel that will help meet ever-increasing and dynamic global energy demands.”

For Air Products, the divestiture aligns with its strategic focus. Seifi Ghasemi, Air Products’ Chairman, President and CEO, explained: “The decision to divest our LNG heat exchanger technology and equipment business reflects Air Products’ continued focus on its two-pillar strategy — to grow our core industrial gas business and related technology and equipment, and to be a first-mover delivering clean hydrogen at scale to decarbonise industrial and heavy-duty transportation sectors.”

The LNG market has seen significant growth, quadrupling over the past two decades, and is projected to double in the next 20 years, driven by demand in power and data centre markets.

The acquisition includes Air Products’ LNG Business, which employs approximately 475 people, with headquarters in Allentown, Pennsylvania, and a 390,000-square-foot manufacturing facility in Port Manatee, Florida.

The transaction is expected to close before the end of the calendar year, subject to customary closing conditions and regulatory approvals.

Honeywell anticipates the acquisition to be accretive to adjusted earnings per share in the first full year of ownership.