Electronics giant Honeywell acquiring Intermec for $600 million
New facility still in construction in downtown Cedar Rapids
Intermec Inc., which designs electronic products for inventory and supply chain management in Cedar Rapids, will be acquired by Honeywell International for over $600 million, the companies announced Monday.
Based in Everett, Wash., Intermec employs about 250 in Cedar Rapids. It is building a new $12.5 million facility in downtown Cedar Rapids at 601 Third St. SE.
"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 CEO Roger Fradin.
Honeywell said the combined business entity will be a "technology and information management solutions leader in the Auto Identification and Data Capture industry."
The Intermec business will be integrated into Honeywell's Minneapolis-based Scanning and Mobility Business, according to Bruce Eric Anderson, a Honeywell spokesman.
"It has been a significant growth area for us," Anderson said. "We see enormous growth opportunities for the combined entity considering the technology Intermec has, primarily in voice and RFID (radio frequency identification)."
Anderson said Honeywell was not prepared to announce how specific facilities like the Intermec operation in Cedar Rapids will be affected because it is too early in the process.
Honeywell already supplies a line of handheld computers that serve the markets targeted by Intermec's handheld computers engineered in Cedar Rapids.
The Cedar Rapids Metro Economic Alliance, which worked with Intermec to obtain state and local incentives for its new building, did not receive any immediate communication from Intermec or Honeywell about the merger or how it would play out in Cedar Rapids, spokeswoman Pam Hinman said.
Intermec Chairman and Interim CEO Allen Lauer said the decision followed a "thoughtful and comprehensive strategic review of Intermec’s business with the goal of determining the best possible overall outcome for our stakeholders."
"The agreement with Honeywell not only maximizes value for our stockholders, it combines our history of innovation and engineering expertise, global reach and leading products and solutions with the significant global scale and resources of Honeywell.”
The transaction represents a 48 percent increase over Intermec's closing stock price on Nov. 1, the last trading day beore Intermec announced it had retained BofA Merrill Lynch to examine strategic alternatives.
The $10-per-share all-cash deal to acquire Intermec sent the price of Intermec shares soaring more than 20 percent in trading after Monday's announcement.
The deal is subject to the approval of Intermec stockholders and regulatory approvals. It is expected to close by the end of the second quarter 2013.
Honeywell, based in Morris Township, N.J., is a Fortune 100 technology company active in aerospace, manufacturing and process controls, climate controls and transportation. It competes in many of the same aerospace markets as Cedar Rapids-based Rockwell Collins.
Intermec said after the announcement that it was suspending its search for a new permanent CEO to replace Patrick Byrne, whose resignation and temporary replacement were announced May 1.Intermec had been operating at a loss for the first six months of this fiscal year, but has shown signs of improvement. The company reported third-quarter net earnings of $10.4 million, or 17 cents per share, on Nov. 1. Its revenue of $192.8 million was down 9 percent from the year-earlier quarter.