Technology: Honeywell to acquire EMS Technologies
The acquisition will enhance Honeywell's existing capabilities in rugged mobile computing technologies and satellite communications within its Automation and Control Solutions (ACS) and Aerospace businesses.
in the NewsState of Logistics 2016: Pursue mutual benefit Holiday season sparks retail import shipments, says Port Tracker Driver turnover rate declines, but challenges remain firmly intact AAR reports annual gains in November for U.S. carload and intermodal volumes CEMA reports October booked orders down 19.8% from October 2015 More News
Honeywell announced last month that it has signed a definitive agreement to acquire EMS Technologies, Inc., a leading provider of connectivity solutions for mobile networking, rugged mobile computers, and satellite communications, for $33 per share in cash, or an aggregate purchase price of approximately $491 million, net of cash acquired. The purchase price translates to approximately 13 times EMS’s 2010 earnings before interest, taxes, depreciation and amortization (EBITDA), or approximately 9 times 2010 EBITDA excluding certain corporate costs. The agreement provides for a subsidiary of Honeywell to commence a tender offer within 10 business days to purchase all outstanding shares of EMS.
The acquisition will enhance Honeywell’s existing capabilities in rugged mobile computing technologies and satellite communications within its Automation and Control Solutions (ACS) and Aerospace businesses. EMS’s $181 million Global Resource Management (GRM) division provides highly ruggedized mobile computing products and services for use in transportation, logistics, and workforce management settings as well as secure satellite-based asset tracking and messaging technology for search and rescue, warehousing, and field force automation environments. Through its $174 million Aviation division, EMS provides terminals, antennas, in-cabin network devices, rugged data storage, and surveillance applications predominantly for use on aircraft and in other data gathering objectives.
“EMS is a terrific addition to Honeywell, adding leading positions in attractive markets that are closely aligned with favorable trends in the growing Command, Control, Communications, Computers, Intelligence, Surveillance, and Reconnaissance (C4ISR) space and commercial aerospace, as well as being highly complementary to our existing Scanning and Mobility business,” said Honeywell Chairman and Chief Executive Officer Dave Cote. “Honeywell is uniquely positioned to acquire EMS due to the strategic fit across EMS’s Global Resource Management and Aviation divisions. The acquisition brings engineering expertise, differentiated technologies, global reach, and profitable adjacent segments that build upon our great positions in good industries and enhance our growth profile.”
EMS’s GRM division offers a broad range of solutions for supply chain logistics, mobile workforce management, and remote asset monitoring applications, supported by hundreds of partners worldwide. EMS’s proven mobile resource management solutions include LXE-branded rugged handheld and vehicle-mounted computers featuring multiple radio technologies and satellite-based global tracking and monitoring solutions for cargo, fleet assets, and personnel.
“This is another terrific transaction for our Scanning and Mobility business,” said Honeywell Automation and Control Solutions President and Chief Executive Officer Roger Fradin. “EMS strengthens our core mobile computing business and expands our addressable market with complementary new products, channel partners, and entry into the warehousing and port segments that we believe will be growth drivers for the business. This also represents an opportunity to demonstrate our proven acquisition integration process.”
“Combining EMS products into our Aerospace business means that Honeywell can now deliver the next big leap in satcom technology, a key growth area for aerospace,” said Honeywell Aerospace President and Chief Executive Officer Tim Mahoney. “Our customers will greatly benefit from these new products and solutions, enabling them to leverage the strong global growth of high-speed wireless and satellite data services.”
Honeywell has been informed that all directors and officers of EMS intend to tender all of their respective shares in the Offer. The Offer will be subject to the tender of a majority of EMS’s shares and customary closing conditions, including regulatory approvals. The transaction is expected to close in the third quarter of 2011. Although the transaction would be dilutive in 2011 by three to four cents, it is not expected to impact the company’s previously announced 2011 earnings per share guidance range, and Honeywell anticipates it to be accretive in 2012.
Subscribe to Modern Materials Handling Magazine!Subscribe today. It's FREE!
Find out what the world’s most innovative companies are doing to improve productivity in their plants and distribution centers.
Start your FREE subscription today!
Optimizing home delivery: It takes more than planning 9th Annual Salary Survey: Success and Satisfaction Continue to Reign View More From this Issue