00:00Honeywell has been for years now trying to, you know, reshape its portfolio.
00:07They've never met a spinoff they don't like.
00:09They're spinning off their aerospace division.
00:11They've already spun off their chemicals unit.
00:13That's a whole separate company called Solstice.
00:16So they love doing deals.
00:19They also, you know, do acquire things.
00:21But in this one, it's been a long simmering situation.
00:25They announced last July that they were exploring options for this unit along with another unit that they haven't sold
00:31yet.
00:32And we had been tracking this one for months.
00:34We thought private equity would come in.
00:36But ultimately, Brady Corporation, another public company based in Milwaukee, is swooping in for this.
00:43And it's going to make it a much larger company.
00:45And it's not just Honeywell either.
00:473M has looked into selling assets too.
00:50What is it about these big industrials that at one point like to be big, like to be diversified,
00:54are now in love with the idea of slimming down, realigning their portfolios, divesting assets.
01:01What happened in the thinking?
01:03We're seeing it across industries, not just in the industrial space.
01:06For whatever reason, every few years, diversification becomes popular with investors.
01:11And we see, you know, GE buying NBC and those types of things to look back at history.
01:16And then eventually we get into spinoffs, which are now investor friendly.
01:22And it doesn't take much to, you know, boost your stock.
01:25If you say you're going to sell units or spinoff into public companies, some public companies are now have turned
01:32into a dozen companies.
01:33It's quite amazing to watch.
01:34So it looks like I'm just looking at the PGEO function on the Bloomberg terminal, Honeywell's down to kind of
01:39four lines of business, airspace, technologies, building automation, industrial automation, and energy and sustainability.
01:45Are they comfortable with their portfolio, generally speaking, now?
01:48Or do you think we'll get more deals here?
01:50I wouldn't rule them out for doing more M&A to actually, you know, as they reshape their portfolio, think
01:57what makes sense.
01:58We've definitely seen industrial companies get more into software.
02:03I know software has kind of fallen out of favor right now, but there's definitely these sort of big hardware,
02:11software products that might be hard to disintermediate with AI.
02:16So that's one area to look.
02:17They've also invested in quantum computing.
02:20Quantinium, a company that Honeywell owns, they've been trying to take that one public.
02:23That's another one to watch.
02:24But we'll see under their CEO, Vimal Kapoor, they've definitely been making a lot of moves to just reimagine what
02:32Honeywell is.
02:33And what about Brady?
02:34Is Brady looking to get bigger?
02:36I mean, it's buying this business from Honeywell, but can we expect more dealmaking from Brady?
02:41They'll definitely get bigger.
02:42Before this deal, they had about a $3.9 billion market cap, and they're paying $1.4 billion cash.
02:48So this is by far the largest deal ever for Brady, a Midwest company founded in 1914.
02:53They make some of these products already, so this will help them maybe corner the market in this sort of
03:01industrial barcode, logistics scanning type stuff.
03:04Maybe we can get the coffee, I'll respond to the coffee that will be an active interface.
03:04And that's where you can get��les from Google you to find the game!
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