Honeywell announced expansion plans this week with the target being Intermec. With increasing consolidation seen in the barcode, payment processing and point of sale spaces this acquisition comes as no surprise. Intermec, whose stock was way off its peak of about $37 a share in October 2005 (source Yahoo Finance), and traded as low as $4.97 this year, was certainly a candidate for purchase at $10 a share. They were also rumored to have a good portfolio of patents.
In a statement released by Honeywell,
"The addition of Intermec is a natural extension to our Scanning & Mobility business, which was established through the successful acquisitions of Hand Held Products, Metrologic and EMS," said Honeywell Automation and Control Solutions President and Chief Executive Officer Roger Fradin. "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. Intermec has extensive engineering capability and broad sales reach that we look forward to integrating into our existing organization in an effort to build a leading position in the AIDC marketplace. Once again, our world class acquisition integration process will deliver value to shareholders."
"The purchase price translates to approximately ten times Intermec's trailing 12 months (TTM) earnings before interest, taxes, depreciation and amortization (EBITDA) as of September 30, 2012, excluding certain corporate and public company costs, or approximately five times on a synergy adjusted run-rate basis. The transaction is expected to close by the end of the second quarter of 2013 pending Intermec shareholder approval and following customary regulatory reviews".
Interestingly but not surprisingly, some insider holdings at Intermec increased significantly over the last 18 - 24 months. Using sources in the public domain such as Morningstar.com and Secform4.com and others, we found that some executives seemed to bulk up their holdings - while recently cutting back on sales of stock grants/awards that they got at a zero cost. Of course, the stock price was very weak, and if I were an insider who truly believed in the company value, I'd probably have increased my holdings too.
How will this affect the barcode distribution business? Or won't it? We'll write about that soon. Have an opinion? Write to us with the Contact link below.
More on Intermec:
- Intermec Mobile Computer Solves Shipping Challenge ... a more flexible and inexpensive alternative to traditional home delivery services, as it allows customers to pick up their items at locations closer to their home or work. A long-standing Intermec customer, ... 02 October 2012
- Click here for a list of all our articles mentioning Intermec https://barcode.com/search.html?searchphrase=all&searchword=intermec
More on Honeywell:click here.