(By Balaseshan) Honeywell International Inc. (NYSE: HON) said it has agreed to buy Intermec Inc. (NYSE: IN) for about $600 million net of cash and debt acquired, and guided fiscal 2013 largely below estimates.
Under the terms of the agreement, Honeywell will purchase all outstanding common shares of Intermec for $10.00 per share in cash. The transaction represents a 48% premium to Intermec's closing price on November 1, the last trading day prior to Intermec announcing it had retained BofA Merrill Lynch.
The deal is expected to further enhance Honeywell's scale in rugged mobile computing devices, building on its Scanning & Mobility franchise within the company's Automation and Control Solutions portfolio.
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Although the transaction would be dilutive in 2013 by three to four cents, the estimated impact is included in Honeywell's announced 2013 earnings per share (EPS) guidance range, and the company anticipates Intermec to be accretive in 2014.
Upon completion of the acquisition, Intermec would become part of Honeywell Scanning & Mobility in Honeywell's Automation and Control Solutions business. Intermec, which is headquartered in Everett, Washington, employs about 2,200 employees and operates more than 65 offices worldwide, serving nearly every region globally.
In light of announcement, Intermec said it is suspending its previously announced search for a permanent Chief Executive Officer. The transaction is expected to close by the end of the second quarter 2013.
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In addition, Honeywell reaffirmed its full year 2012 EPS guidance of $4.47, which is the midpoint of previous forecast of $4.45 to $4.50, and its sales outlook of $37.5 billion. Street analysts predict EPS of $4.47 on revenue of $37.63 billion.
For the fiscal 2013, the company expects EPS of $4.75 to $4.95 and sales of $39.0 billion to $39.5 billion, while Street predicts EPS of $4.95 on revenue of $39.42 billion.
"We expect 2012 to be another year of strong execution for Honeywell, building on an established track record over the past decade. While we're planning for a continued slow-growth macro environment in 2013, we will remain flexible and adhere to our disciplined focus on growth, efficiency and competitiveness, driving sales and margins higher," said Honeywell Chairman and CEO Dave Cote.
HON closed Friday's regular session up 0.73% at $61.97, while IN ended down 1.48% at $7.98.