Honeywell Buys Intermec for $600M

— December 12, 2012

Honeywell dropped a huge bombshell during its financial forecast call on Monday. The AIDC giant announced that it had signed an agreement purchase one of its biggest competitors, Intermec, for about $600 million dollars. The repercussions from this merger is going to shake up the Channel and VSR will have regular updates as the deal progresses, particularly in regards to existing channel programs.
 
Here are the details, courtesy of Honeywell:
 
Honeywell announced that it has signed a definitive agreement to acquire Intermec, a leading provider of mobile computing, radio frequency identification solutions (RFID) and bar code, label and receipt printers for use in warehousing, supply chain, field service and manufacturing environments for $10 per share in cash, or an aggregate purchase price of approximately $600 million, net of cash and debt acquired. The transaction is expected to further enhance Honeywell’s scale in rugged mobile computing devices, building on its Scanning & Mobility franchise within the company’s Automation and Control Solutions portfolio.
 
The purchase price translates to approximately ten times Intermec’s trailing 12 months (TTM) earnings before interest, taxes, depreciation and amortization (EBITDA) as of September 30, 2012, excluding certain corporate and public company costs, or approximately five times on a synergy adjusted run-rate basis. The transaction is expected to close by the end of the second quarter of 2013 pending Intermec shareholder approval and following customary regulatory reviews.
 
“The addition of Intermec is a natural extension to our Scanning & Mobility business, which was established through the successful acquisitions of Hand Held Products, Metrologic and EMS,” said Honeywell Automation and Control Solutions President and Chief Executive Officer Roger Fradin. “While Intermec strengthens our core scanning and mobile computing business, it opens up entirely new opportunities in RFID, voice solutions and barcode and receipt printing segments that we currently don’t serve. It expands our product offerings and strengthens our intellectual property portfolio putting us in position to be a technology leader for years to come in the highly attractive automatic identification and data capture (AIDC) industry. Intermec has extensive engineering capability and broad sales reach that we look forward to integrating into our existing organization.”
 
Upon completion of the acquisition, Intermec would become part of Honeywell Scanning & Mobility in Honeywell’s Automation and Control Solutions business. Intermec employs approximately 2,200 employees and operates more than 65 offices worldwide, serving nearly every region globally. The company is headquartered in Everett, Washington.
 
Although the transaction would be dilutive in 2013 by three to four cents, the estimated impact is included in the company’s announced 2013 earnings per share guidance range, and Honeywell anticipates Intermec to be accretive in 2014. 

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