Honeywell to acquire Intelligrated for $1.5 billion

Honeywell announced it has signed an agreement to acquire privately held, supply chain and warehouse automation leader Intelligrated for $1.5 billion from a company backed by the Permira funds.

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.

This is the second announcement of the acquisition of a leading systems integration firm in the past two weeks, and comes on the heels of the June 21, 2016 announcement that KION is purchasing Dematic for $2.1 billion.

The transaction is expected to close by the end of the third quarter, subject to customary closing conditions, including regulatory review. Upon approval, 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. The company has grown at a compound annual growth rate (CAGR) of approximately 13% over the past three years, faster than the industry overall. Intelligrated 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 U.S. 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.”

“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. “The leadership team at Intelligrated is top-notch and we look forward to working with them to expand our presence globally.”