Honeywell to buy Intermec for $600m in cash
The company said it believed the purchase, for around 10 times the value of Intermec’s pre-tax earnings for the 12 months up to the end of September, would boost the scale of its rugged mobile computing device business.
Honeywell said that subject to Intermec shareholder approval and regulatory reviews, it believed the deal could close by the end of the second quarter 2013.
Intermec confirmed yesterday that the deal had been agreed by the boards of directors of both companies, and also expected a Q2, 2013 conclusion.
According to its latest results, Intermec made a $272.4m net loss in the nine months up to the end of September 2012, compared to a $10.7m loss in the equivalent period in 2011.
The company, which generated $848m in sales in 2011, has been struggling in North America, Europe, the Middle East and Asia, although has achieved revenue growth in the Latin America region.
Intermec had been carrying out a review of its business in the light of declining sales in most of its regions
Intermec has been undertaking a review of its long-term strategic direction and leadership in recent months to respond to its various challenges.
The company launched a restructuring programme back in June to cut operating costs in North America and Europe, with the intention of cutting 7% of its global workforce, about 170 positions.
The firm had been searching for a new chief executive since Patrick Byrne departed in January, but said today it has called off the search in light of the Honeywell offer.
Intermec chairman and interim CEO Allen J Lauer said his company’s board had conducted a “thoughtful and comprehensive” review of the company with the aim of finding the best outcome for stakeholders.
“The agreement with Honeywell not only maximizes value for our stockholders, it combines our history of innovation and engineering expertise, global reach and leading products and solutions with the significant global scale and resources of Honeywell,” said Lauer.
Scanning & Mobility
The acquisition will see Intermec becoming part of Honeywell’s Scanning & Mobility unit, which has been built through previous acquisitions of Hand Held Products, Metrologic and EMS.
With its headquarters in Everett, Washington, Intermec currently employs 2,200 employees in more than 65 offices across the world.
Roger Fradin, the Honeywell Automation and Control Solutions president and chief executive, said the addition of Intermec was a “natural extension” of his company’s business in this area.
“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,” said Fradin.
“Intermec has extensive engineering capability and broad sales reach that we look forward to integrating into our existing organisation in an effort to build a leading position in the automatic identification and data capture marketplace.”
New Jersey-based Honeywell is a Fortune 100 company with about 132,000 employees worldwide, operating in the aerospace, materials and transportation industries as well as in the automation and control sector, in which its Scanning & Mobility unit operates.
The Scanning & Mobility business provides scanning and mobile computing technology for the retail and healthcare industries as well as the logistics, supply chain and transport sectors.