Published: 13 June 2011
Honeywell International said on Monday that it had agreed to acquire EMS Technologies, a maker of systems for mobile networks and satellites, for $506 million in cash.
It is Honeywell’s biggest acquisition in the United States since its $720 million deal for Metrologic Instruments in July 2008, according to Capital IQ data.
Honeywell is paying $33 a share, a premium of 33 percent above EMS’s closing stock price on Friday and 59 percent above the price on April 18, the day before EMS said it would explore a potential sale.
The terms of the deal provide for a subsidiary of Honeywell to start a tender offer within 10 business days to buy all the outstanding shares of EMS. Subtracting the cash being acquired, Honeywell values the deal at $491 million.
“EMS is a terrific addition to Honeywell, adding leading positions in attractive markets that are closely aligned with favorable trends in the growing command, control, communications, computers, intelligence, surveillance and reconnaissance space and commercial aerospace, as well as being highly complementary to our existing scanning and mobility business,” Dave Cote, Honeywell’s chief executive, said.
Honeywell expects the acquisition will be dilutive in 2011 by 3 to 4 cents a share, but will not affect its previous forecast on earnings per share.