Honeywell is exploring strategic options for its Productivity Solutions and Services (PSS) and Warehouse and Workflow Solutions (WWS) units as part of a broader strategy to streamline its business operations. This move is in preparation for the upcoming separation of Solstice Advanced Materials by late 2025 or early 2026 and Honeywell Aerospace in the latter half of 2026. The company’s goal is to simplify its structure and concentrate on high-growth and high-margin sectors to enhance shareholder value. By divesting or spinning off non-core units, Honeywell aims to improve operational efficiency, optimize capital allocation, and unlock portfolio value, potentially boosting valuations and shareholder returns.
The PSS unit provides mobile computing, data collection, and software solutions across retail, healthcare, and transportation sectors, including technologies like barcode scanners and rugged mobile devices. Meanwhile, the WWS unit focuses on warehouse automation, offering systems such as conveyor belts, robotic picking solutions, and warehouse management software for e-commerce and logistics industries. Both units operate in competitive markets that require substantial R&D and capital investment, which could strain Honeywell’s resources. Divesting these units could allow Honeywell to focus on higher-return opportunities while enabling PSS and WWS to thrive under new ownership.
Together, PSS and WWS contribute significantly to Honeywell’s Automation segment, which generated around $4.8 billion in revenue in 2024, with these units accounting for $2.5-$3 billion. While their operating margins are solid, likely in the mid-teens, they are below Honeywell’s core aerospace margins of 20-25%. Despite challenges, the scale and technological leadership of PSS and WWS make them attractive to potential buyers, including strategic companies like Zebra Technologies and Rockwell Automation, as well as private equity firms experienced in automation and technology.
Following the separation, Honeywell aims to become a leaner, more focused industrial technology company, concentrating on Building Technologies and its remaining automation businesses, alongside standalone Aerospace and Solstice Advanced Materials entities. The remaining Honeywell Automation business is projected to generate $18 billion in annual revenue with an operating margin target exceeding 20%, while Honeywell Aerospace is expected to generate $15 billion with margins potentially over 25%. Honeywell’s exploration of strategic alternatives for PSS and WWS is a part of its ongoing effort to refine its portfolio and position itself as a focused, high-margin industrial leader.
