Terms of the deal call for Honeywell to pay $10 per share in cash for Everett, Wash.-based Intermec, a premium of 25% over the target's Friday $7.98 per share close. The deal values Intermec's equity at about $603 million.
Intermec is a maker of radio frequency identification, or RFID, chips and products as well as barcode printers and scanners. Honeywell, a Morris Township, N.J.-based maker of products for sectors including aerospace, security, healthcare and energy, said the purchase would complement its existing mobile computing offerings and build on its scanning and mobility offerings.
Roger Fradin, head of Honeywell's automation and control solutions business, called the purchase of Intermec "a natural extension to our scanning and mobility business." He said the deal will allow Honeywell to expand into new markets.
"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," Fradin said. "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 [automatic identification and data capture] marketplace."
Intermec was spun out of Western Atlas Inc. in 1997. But the company has come under pressure of late, with investor Cramer Rosenthal McGlynn LLC in a May regulatory filing voicing concerns about the company's lagging stock price and undervalued patent portfolio. The views of CRM, which at the time owned about 16.5% of Intermec, were echoed soon after by 9% holder Gamco Investors Inc.
The company soon after lost its CEO, and in early November announced it had retained Bank of America Merrill Lynch and Perkins Coie LLP to help explore options. The $10 per share buyout price is a premium of 48% over the final trading day prior to the company saying it was considering alternatives.
Intermec chairman and interim CEO Allen J. Lauer in a statement said "we are pleased that Honeywell recognizes and values the capabilities as well as the strategic potential of our business." He said the deal both "maximizes value for our stockholders" and gives Intermec the scale and resources it needs to expand.
The price values Intermec at about 10 times its trailing 12-month Ebitda, excluding certain corporate and public company costs. Honeywell expects to close the deal in the second quarter of 2013, pending Intermec shareholder and regulatory approval.
French mergers and acquisitions lawyer Laurent Faugerolas joined Dechert LLP. For other updates launch today's Movers & shakers slideshow.
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