Honeywell to buy supply chain, warehouse automation firm Intelligrated for $1.5 bn

Diversified US conglomerate Honeywell International Inc yesterday struck a deal to buy privately-held supply chain and warehouse automation company Intelligrated Inc for $1.5 billion from a company backed by the Permira funds.

The move comes just three months after it abandoned its $90.7-billion offer to buy rival United Technologies Corp. (See: Honeywell abandons $90.7-bn offer to buy rival United Technologies)

Honeywell is buying Intelligrated from a company backed by the Permira funds, which had acquired it in 2012 from private equity firm for more than $500 million.

Honeywell said that the purchase price translates to approximately 12 times Intelligrated's estimated 2016 earnings before interest, taxes, depreciation and amortization (EBITDA). The company's 2016 sales are estimated to be approximately $900 million.

Post closing, Intelligrated will be part of Sensing and Productivity Solutions (S&PS) in Honeywell's Automation and Control Solutions business.

Intelligrated designs, manufactures, integrates and installs complete warehouse automation solutions, software and services that result in smarter distribution and fulfillment operations.

Its supply chain and warehouse solutions provides improved productivity and lower costs for retailers, manufacturers, and logistics providers around the world.

The Mason, Ohio-based company has grown at a compound annual growth rate (CAGR) of approximately 13 per cent over the past three years, faster than the industry overall.

It has a large and growing customer base of more than $5 billion, including leading Fortune 500 retailers, manufacturers and logistics providers worldwide, top consumer products companies, 30 of the top 50 US retailers, and half of the top 100 Internet retailers.

"E-commerce continues to grow at an unprecedented rate and customer demands for faster delivery times have created a need for warehouse, logistics and fulfillment solutions that can increase productivity and lower costs for our customers," said Alex Ismail, president and CEO of Honeywell Automation and Control Solutions.

"This acquisition fits with our vision for a connected industrial company and a connected worker," he added.

"Intelligrated's leading supply chain automation solutions are a fantastic complement to Honeywell's portfolio of industry-leading workflow performance solutions including cloud-connected mobile worker applications, high-performance data collection hardware, and other technologies to improve worker productivity," said John Waldron, president of Honeywell Sensing and Productivity Solutions. 

Honeywell, a Fortune 500 company, is an US multinational conglomerate producing several commercial and consumer products, engineering services and aerospace systems.

The New Jersey-based company operates three business units, known as a Strategic Business Unit–Aerospace, Automation and Control Solutions, and Performance Materials and Technologies.

It generated net profit of $4.768 billion last year on sales of $38.58 billion.