Honeywell International (HON) had sales of 36.7 billion U.S. dollars in fiscal year 2019. It has successfully consolidated its position as a Fortune 100 company by expanding into many industries and offering different products. Honeywell’s success is partly due to the large number of acquisitions it has completed.
Honeywell’s five-year strategic plan from 2014 to 2018 requires investment of US$10 billion in mergers and acquisitions. Without these subsidiaries, Honeywell’s business would not be so diversified in terms of products, geographic locations or industries.
- Honeywell has made multiple acquisitions in the past decade, the largest of which occurred in 2016.
- In 2016, Honeywell made its largest acquisition, acquiring the Elster Group for US$5.1 billion. In the same year, it also acquired Intelligrated for $1.5 billion.
- In the past few years, it has made big bets on sensing and detection systems with many companies.
- Recently, however, Honeywell is more interested in downsizing and completing the spin-off of its residential and transportation systems business.
1. Elster Group
Honeywell’s largest acquisition was the Elster Group from Melrose Industries PLC. The acquisition was completed for US$5.1 billion. Honeywell is attracted by the high-growth product area and geographic location of the Elster Group.
Elster Group is a leading supplier of gas meters, electric meters and water meters, including all related communication and software solutions. The company’s total assets in 2015 were approximately £2.5 billion and it employs nearly 7,000 people.
2. EMS Technologies, Inc.
Honeywell acquired EMS Technologies for US$491 million. The 2011 acquisition expanded Honeywell’s position in the global scanning and mobile industry. EMS Technologies focuses on rugged and durable handheld vehicle-mounted products. Items sold by the aviation sector include rugged data storage, surveillance applications, antennas and terminals.
Honeywell acquired Intelligrated for USD 1.5 billion in cash in July 2016. Headquartered in Ohio, Intelligrated has more than 3,000 employees and is expected to have annual sales of approximately US$900 million in 2016.
The Sensing and Productivity Solutions Division of Honeywell’s Automation and Control Solutions Division is using Intelligrated. Honeywell incorporated Intelligrated’s supply chain automation solutions into Honeywell’s current workflow performance process.
In 2013, Honeywell completed the acquisition of Intermec and spent $600 million in cash in the transaction. Intermec provides value to Honeywell in a variety of ways, including innovative products, engineering expertise, extensive global distribution channels, and valuable technology in the AIDC industry.
Intermec is a leading provider of mobile device computing, radio frequency identification services, printing solutions, and data collection products. Intermec merges into Honeywell’s Scanning and Mobility Division.
5. King’s safety clothing
Honeywell acquired Singapore-based King’s Safetywear for US$338 million in 2011. The transaction expands Honeywell’s customer base because KWS’s business is strategically placed in high-growth regions. Its steel-toed boots under the Otter, King’s and Oliver brands are mainly sold in Australia, Asia and Europe. Honeywell’s motivation to complete the transaction is related to strengthening its workplace safety equipment business.
In 2008, Honeywell spent US$1.2 billion to acquire Norcross Safety Products (NSP). NSP produces respirators, helmets, protective gloves and other protective equipment for industrial workers and firefighters. Norcross is headquartered in Illinois and becomes part of Honeywell’s Automation and Control Solutions division.
7. RAE system
Honeywell announced in 2013 that it had reached a definitive agreement to acquire RAE Systems Inc. This private manufacturer produces gas and radiation detection systems. Its products include a full range of fixed and movable sensing and testing equipment sold to governments, emergency response agencies, and industrial entities. At the time of the transaction, RAE Systems’ products have been used in more than 120 countries. RAE Systems was founded in 1991, is headquartered in California, and was acquired for $340 million.
8. Sperian protection
In September 2010, Honeywell completed the acquisition of Sperian Protection, which produces personal protective equipment for general industry, construction, fire protection, and electrical safety. Honeywell paid Sperian US$1.4 billion, which is 1.5 times the annual sales. Sperian focuses on head protection (sight, hearing and respiratory equipment) and body protection (clothes, gloves, footwear).
In early 2016, Honeywell signed the final agreement to acquire Xtralis, a global supplier and industry leader of aspirating smoke detection and security video analysis software. Honeywell paid US$480 million in this transaction. Xtralis’ client base includes Fortune 500 companies, iconic sites and infrastructure. Its products are used to protect data centers, historic buildings, airports and manufacturing sites. Xtralis is headquartered in Ireland and has 500 employees.
Honeywell has been relatively quiet in terms of acquisitions. In fact, the company has taken the opposite approach and completed various spin-offs. This is because the company appointed a new CEO Darius Adamczyk in 2017. In the past few years, Honeywell divested its transportation systems, residential and ADI global distribution businesses last year.