Engineering major Honeywell International Inc. yesterday announced its acquisition of Norcross Safety Products LLC from Odyssey Investment Partners and GE Asset Management for a sum of about $1.2 billion.

Honeywell is a major American multinational conglomerate that produces a variety of consumer products, engineering services, and aerospace systems for a wide variety of customers, from private consumers to major corporations. Norcross is a privately-held manufacturer of protective equipment used by industry workers and emergency responders like firefighters and utility workers. Their repertoire includes helmets, protective footwear and respirators. The company generated sales of $609 million last year. In comparison, Honeywell had revenues of $34.6 billion in 2007.

After the acquisition and integration, Illinois-based Norcross will become part of Honeywell's Life Safety unit within the Automation and Control Systems division, the company's largest by sales last year, posting numbers of $12.5 billion. The New Jersey-based Fortune 500 company is looking to expand its product portfolio to get a bigger chunk of the $20 billion protective products market.

Honeywell already has among its client base several customers of its fire and gas detection systems, to whom it would expect to leverage Norcross products as well, as per a statement released by the company. Honeywell also may incorporate sensors and advanced fiber materials into the products, it said.

Mark Levy, president of Honeywell Life Safety, said in a statement that the deal "creates an exciting adjacency" for his business. According to Honeywell, the company will also benefit from Norcross' extensive distribution network at more than 2,500 locations.

"We expect strong sales synergies across Honeywell businesses and opportunities to add value to Norcross products with Honeywell electronic gas sensors, fire detection and advanced fiber material technologies," Levy said. "Norcross and its leadership in the personal protection segment are highly complementary to our portfolio and customer base."

The deal "provides Honeywell with a complete platform in a fragmented, global segment which is expected to yield substantial growth opportunities," Roger Fradin, Honeywell's group president, said in a prepared statement. It will enable Honeywell "to fully participate in the broad and highly regulated industrial safety marketplace," he added.
Odyssey, a New York-based buyout firm, bought Norcross in May 2005 in partnership with GE Asset Management. While Odyssey was the major partner with a 74.9 per cent stake, GE Asset Management owned 22.7 per cent of the company. Odyssey had invested $82 million in cash in the deal, and now stands to earn $495 million on the sale, a return on investment of a whopping 500 per cent in less than three years.

The company was previously owned by an investment group that included Trimaran Capital Partners and John Hancock Life Insurance Co. Odyssey managing principal Brian Kwait said his firm was then attracted by Norcross' history of steady revenue growth and a diverse product mix that could be fortified through acquisitions.

Kwait spoke about double-digit revenue growth at Norcross under Odyssey management, and credited the successful repositioning to Norcross president and CEO Robert A. Peterson and senior executives David F. Myers Jr. and William Hayes. They are expected to stay on after the acquisition, as per announcement made by Honeywell.

Norcross has around 3,300 employees in several locations, including Charleston, S.C., Cranston, R.I., and Dayton, Ohio, with others in Canada, Mexico and Europe. None are expected to be laid off at the moment.

With this buyout, Honeywell continues its stream of large-scale acquisitions which started with the takeover of Pittway Corp., a maker of burglar and fire alarms, in 2000 for $2.14 billion. In 2005, the company bought Novar Plc for 1.08 billion pounds ($2.15 billion), including debt, in 2005 to expand its fire and ventilation systems business in Europe. Smaller acquisitions include  Zellweger Analytics Inc. and First Technology Plc. Honeywell had bought 45 companies from 2003 through 2007, paying a total of just over $4 billion, an average of under $100 million apiece.

Honeywell's shares rose 63 cents or 1.1 per cent to close at $58.27 on Friday trade.