How chiefs of Honeywell Aerospace and Leonardo DRS each plan to expand

A Honeywell office in Atlanta, Georgia, US, on Wednesday, Oct. 25, 2023. Honeywell International Inc. released earnings figures on October 26. Photographer: Elijah Nouvelage/Bloomberg via Getty Images

PARIS AIR SHOW — The chief of Honeywell Aerospace told Breaking Defense the firm is looking to increase its mergers and acquisitions activity in its near-future, a business strategy separately echoed by the head of Leonardo DRS days later.

“Our M&A pipeline is as robust it has ever been in my years of Honeywell Aerospace,” company CEO Jim Currier said in an interview on the sidelines of this year’s Paris Air Show.

“I do anticipate we will continue to be acquisitive,” he said. “I do anticipate Europe being a great place to be able to look at where those opportunities represent, from an M&A standpoint.”

It’s an interesting position to be in for Currier, as Honeywell is in the process of splitting itself into three different companies in 2026. Honeywell Aerospace is expected to take on the vast majority of the firm’s defense work.

While clearly optimistic about the firm’s M&A future, Currier declined to go into details of what areas he was interested in, as “I think it gives a little bit too much insight” into company plans. But he pointed to the acquisitions of a pair of smaller European firms, including Italian company Civitanavi, as a guide.

“We were specific about technology gaps in the portfolio, where they had a capability that we had maybe a smaller amount of that capability, so we’re able to expand upon that through those acquisitions,” he said, calling it a “one plus one equals three” situation

“It’s got to be strategic. It has to be about a technology gap that we’re trying to serve, or where we see opportunistic opportunities whereby there’s certain sales synergies that can be realized, that we can actually provide a better product, ultimately,” Currier said. “Those are the ways we look at M&A across the board, and they can be small, and they can be large.”

Days later, Leonardo DRS head Bill Lynn was equally blunt that he expects to look for M&A opportunities in the coming year.

“We’ve generated very strong organic growth” in recent years, Lynn told Breaking Defense. “We think the next step for us, a priority for capital allocation, is to supplement that with inorganic” growth.

However, “Our focus in that is not everything. We are a mid-tier company with four core markets, that’s about right for our size company. So what we would like to do is, rather than add a fifth and a sixth market, what we would focus on is strengthening in those four core markets.”

As examples, Lynn pointed to the company’s sensor business, and how adding tactical computing or artificial intelligence capabilities would help create greater connectivity between the company’s sensing offerings. Similarly, the company has some space work, which has been growing organically, but, “If we saw an acquisition that would, you know, leapfrog some of those investment steps, that would be interesting.”

Ultimately, “We don’t want to get too far from home. We want to expand, but we want to expand in things that we know and where we already have an established position.”

The first Trump administration was viewed as friendlier to M&A activity than the Biden administration, and the broad expectation among industry watchers has been that M&A will once again face fewer regulations in this second administration. Lynn, however, wasn’t ready to state that is absolutely likely to happen.

“Normally, you kind of expect less regulation from a Republican, but [you] need to see more of the personnel picks. You need to see a couple of examples,” Lynn said. “We’ll start to see people do M&A and, you know, do they get approved? Or is there more challenges? I just haven’t seen enough to” predict.