Honeywell Buys Life Sciences Software Group Sparta Systems For $1.3 Billion

Honeywell will pay private equity firm New Mountain Capital $1.3 billion for life sciences software group Sparta Systems.
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Honeywell International  (HON) - Get Report agreed Monday to buy privately-held Sparta Systems for $1.3 billion.

The all-cash deal will see Sparta, an enterprise quality management software expert controlled by private equity group New Mountain Capital, folded into the Honeywell business. The Dow component said it will utilize Sparta's AI and platforms to boost growth in its life sciences division while expanding into new markets. 

Based in Hamilton, New Jersey, Sparta Systems has around 250 employees worldwide and a customer base of more than 40, including most of the biggest pharmaceutical and medical device companies in the world. 

"Sparta's TrackWise Digital and QualityWise.ai are a welcome addition to Honeywell's enterprise performance management software, Honeywell Forge, and will further enhance the link between quality and production data for life sciences manufacturers," said Que Dallara, CEO of Honeywell Connected Enterprise. "Our combined offerings will make it easier for customers to gain critical insights from manufacturing and quality data that can improve their manufacturing processes while ensuring product quality, patient safety, and supply chain continuity."  

Honeywell shares were marked 0.3% lower in early trading Tuesday to change hands at $210.00 each, a move that pegs the stock's six-month gain at around 45%.

Honeywell posted adjusted third quarter earnings of $1.56 per share in late October on sales of $7.8 billion, a 14% decline from the same period last year, as the industrial group's aerospace division struggled amid the global coronavirus pandemic. 

Honeywell said at the time that it expects current-quarter sales of between $8.2 billion and $8.5 billion, a drop of between 11% and 14% from the same period last year, and per-share earnings of between $1.97 and $2.02, down 2% to 4% on an adjusted basis.

The Sparta transaction, Honeywell said, won't affect its 2020 outlook for sales in the range of $31.9 billion to $32.2 billion and adjusted earnings of around $7.00 to $7.05 per share.