Honeywell International Inc. (HON), Motorola Solutions Inc (MSI), General Electric Company (GE): The Conglomerate Makes Another Acquisition

In December of 2012, Morristown, New Jersey-based Honeywell International Inc. (NYSE:HON) announced its intention to purchase Everett, Washington-based bar code manufacturer Intermec Inc. (NYSE:IN) for about $600 million in cash. This deal would combine a major industrial conglomerate and a struggling niche company that had been experiencing serious financial duress. Although Honeywell’s motivations for the acquisition were not immediately clear, Intermec operates in a strategic space that just about any major consumer-focused manufacturer would want to enter.

At the moment, this deal seems likely to go through as currently planned. Although both companies have received additional requests for information from the FTC, Intermec Inc. (NYSE:IN)’s shareholders have already approved the purchase. As such, there is nothing to stop the deal’s completion after the termination of the regulatory investigation.

About Honeywell International Inc. (NYSE:HON) and Intermec

Honeywell is an international machinery manufacturer with a heavy North American presence. The company develops, manufactures and distributes a wide range of systems and equipment for aircraft and airports, including turbines, radar systems, power systems, emergency measures, lighting and communication equipment. Honeywell International Inc. (NYSE:HON) also produces safety, security and automation products for homeowners and business owners. Separately, it operates a sizable materials division that synthesizes and packages volatile organic compounds, resins, imaging chemicals and other specialized compounds. It also maintains a transportation division that manufactures brake and safety systems for passenger vehicles. Honeywell International Inc. (NYSE:HON) employs over 130,000 people and earned $2.9 billion on $37.7 billion in gross 2012 revenues.

Intermec is a highly specialized outfit that got its start as a bar code programmer and manufacturer. The company now focuses primarily on developing hardware and software for RFID applications in consumer and business settings. Its auxiliary services include voice-recognition, fingerprinting, and scanning technologies. To augment the primary products and services that it offers, it maintains an in-house repair and refurbishment division to extend the lifespans of the products that it sells to its customers. In 2012, Intermec Inc. (NYSE:IN) lost $282.5 million on gross revenues of $790.1 million.

Competitors

Honeywell International Inc. (NYSE:HON) has a number of major international competitors that might conceivably have been interested in Intermec. In fact, the company has to be cheered by the fact that it beat its regional rival General Electric Company (NYSE:GE) to this property. While it would be speculative to assert that General Electric Company (NYSE:GE) was ever interested in Intermec, the acquisition nevertheless gives Honeywell a leg up over its larger competitor. Of course, GE is nearly five times the size of Honeywell and earned about seven times as much money last year. General Electric Company (NYSE:GE) had a profit of $14.68 billion in the last twelve months and cash flow from operations of $31.33 billion. General Electric Company (NYSE:GE) could certainly afford an acquisition like Intermec.