Honeywell Agrees To Buy Privately Held Intelligrated For $1.5 Billion

Honeywell International Inc. HON revealed it reached an agreement to buy privately held, supply chain and warehouse automation leader, Intelligrated, for $1.5 billion from Permira funds backed company. According to the company, the acquisition price translated to about 12 times of Intelligrated's expected EBITDA for the year 2016. The company expects 2016 sales to be about $900 million.

Honeywell expects the transaction to close by the end of the third quarter, subject to customary closing conditions. After all the necessary approval, Intelligrated would be part of Sensing and Productivity Solutions (S&PS) in the company's Automation and Control Solutions unit.

The company's president and CEO of Automation and Control Solutions, Alex Ismail, said, "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. This acquisition fits with our vision for a connected industrial company and a connected worker."

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Similarly, the company's president for sensing and productivity solutions, John Waldron, commented, "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. The leadership team at Intelligrated is top-notch and we look forward to working with them to expand our presence globally."

Intelligrated has grown at a compound annual growth rate of approximately 13 percent in the past three years, faster than the industry overall. Intelligrated has a big, as well as, growing customer base of more than $5 billion.

At time of writing, Honeywell was up 0.42 percent on the day, trading at $116.81.