In its second acquisition in less than three months, Honeywell International Inc. (NYSE: HON) this morning announced that it would acquire Intermec Inc. (NYSE: IN) in an all-cash transaction worth about $600 million. In October, a subsidiary of Honeywell acquired a majority stake in Thomas Russell Co. for $525 million.
Honeywell will pay $10 a share for Intermec, a premium of 25.3% to Intermec’s closing price of $7.98 on Friday. The acquisition price represents a 48% premium to Intermec’s share price as of November 1, the date it revealed that it had retained BofA/ML for help with evaluating strategic alternatives. The deal is expected to close in the second quarter of 2013, pending Intermec shareholder approval and the usual regulatory approvals.
Honeywell sang the praises of Intermec’s capabilities:
While Intermec strengthens our core scanning and mobile computing business, it opens up entirely new opportunities in RFID, voice solutions and barcode and receipt printing segments that we currently don’t serve. It expands our product offerings and strengthens our intellectual property portfolio putting us in position to be a technology leader for years to come in the highly attractive automatic identification and data capture (AIDC) industry.
The acquisition will cost Honeywell $0.03 to $0.04 in its 2013 earnings per share (EPS), which the company guided at $4.75 to $4.95 in the same press release this morning. Honeywell also forecast 2013 revenues at $39 billion to $39.5 billion. The consensus estimates from Thomson Reuters called for EPS of $4.95 on revenues of $39.42 billion.
For 2012, Honeywell forecast EPS of about $4.47 on revenues of about $37.5 billion. The EPS estimate is inline with expectations, but the consensus revenue estimate is $37.63 billion.
Shares of Intermec are up 22.7% at $9.79 in premarket trading this morning, in a 52-week range of $4.97 to $8.84. Honeywell share are up 0.7% to $61.97, in a 52-week range of $51.42 to $63.89.