Yesterday Honeywell HON 0.00%↑ completed the spin-off of its Aero Technologies division trading under the new ticker $HONA.
As a reminder the spin-off distributed 1 share of HONA for every 2 shares of HON held at the record date (June 15th). HON simultaneously effected a 1-for-2 reverse stock split.
Yesterday’s closing prices ($220.2 for HONA and 227.8 for HON) equate to a share price of $224 for Honeywell on an ex-ante basis, a slight premium to our purchases in the $208-210 range.
We discussed previously how we did not necessarily expect HONA to initially underperform HON per “traditional” Greenblatt spin-off dynamics and that RemainCo could end up being the more interesting relative opportunity. Interestingly, both tickers sold-off and HON underperformed HONA going into the close.
Relative Valuation
We take a look at the implied 27E EBITDA multiples for both HON/HONA post spin-off. This includes adjustments for the deconsolidation of Quantinuum post IPO and re-allocation of Holdco costs.
Bas…