Brady Closes $1.4 Billion Honeywell Deal After Growth Tripled
Brady closed its $1.4 billion all-cash purchase of Honeywell's Productivity Solutions and Services business on August 3, capping a quarter in which organic sales growth roughly tripled sequentially.
Brady Corporation (BRC) completed its $1.4 billion all-cash acquisition of Honeywell's Productivity Solutions and Services business on August 3, closing a deal first announced April 20 and adding a new Intelligent Productivity Solutions segment alongside its existing Identification Solutions unit. The closing moves the identification-products maker from a single-segment to a two-segment reporting structure and arrives under new leadership: the deal was announced by then-President and CEO Russell R. Shaller, while the closing release was fronted by President and CEO Vineet Nargolwala.
The acquisition closed on the back of an accelerating quarter. In the three months ended April 30, 2026, Brady's fiscal third quarter, sales rose 13.8% year over year, with organic growth of 8.2% compared with 1.6% organic growth in the fiscal second quarter and 2.8% in the fiscal first quarter. Adjusted diluted earnings per share climbed 23.0% to $1.50 from $1.22 a year earlier, outpacing 9.0% growth in the fiscal second quarter and 8.0% in the fiscal first quarter.
The improvement was not confined to one region. Europe and Australia organic sales swung from declines of 0.8% and 1.1% in the fiscal first and second quarters to growth of 4.5% in the fiscal third quarter. Net cash from operating activities also built through the year, rising from $33.4 million in the fiscal first quarter to $53.3 million in the second and $78.2 million in the third, up from $59.9 million a year earlier. Brady entered the fiscal first quarter with a net cash position of $66.8 million, a balance-sheet marker that did not recur in later releases as the company prepared to fund the PSS purchase.
Brady raised its full-year adjusted diluted earnings guidance in each of the past three quarterly releases, moving the range from $4.90 to $5.15 after the fiscal first quarter, to a narrower $4.95 to $5.15 after the fiscal second quarter, then to $5.20 to $5.30 after the fiscal third quarter, the largest single increase of the three revisions. GAAP diluted earnings per share guidance followed the same pattern, tightening from $4.57 to $4.82 to $4.66 to $4.76 by the fiscal third quarter.
For the PSS business itself, Brady now expects approximately $0.80 of incremental adjusted diluted earnings per share within the first year after closing, a more specific figure than the double-digit accretion language used when the deal was announced in April. The company financed the purchase with cash on hand, a senior unsecured credit facility and private placement debt; the original announcement had cited only the $1.4 billion transaction value.
Brady reiterated leverage guidance of approximately 2.5 times net debt to EBITDA immediately following the close, with a target of deleveraging below 2.0 times within two years, unchanged from the figures given in April. The company also held its cost-synergy target at a minimum of $25 million in annual run-rate savings within three years of closing, matching the goal set at deal announcement.
With the acquisition now closed, Brady's near-term results will reflect the combined identification and productivity-solutions businesses for the first time, testing whether the organic growth and margin trends built over the past three quarters carry into the newly formed segment structure.