Honeywell International Inc. is spending $1.5 billion to buy Intelligrated Inc., a Mason, Ohio-based maker of automation systems for warehousing and distribution, and manufacturing — as the big diversified company beefs up technology offerings for online shopping.
“E-commerce continues to grow at an unprecedented rate and customer demands for faster delivery times have created a need for warehouse, logistics and fulfillment solutions that can increase productivity and lower costs for our customers,” said Alex Ismail, president and CEO of Honeywell Automation and Control Solutions. Intelligrated will be part of that business group.
Intelligrated's website says the logistics technology company's installed base includes 30 of the top 50 U.S. retailers and 50 of the top 100 internet retailers. It also provides systems to a range of other industries, including the plastics industry.
Honeywell announced July 1 that it was purchasing Intelligrated from Permira, a London-based private equity fund. Permira bought Intelligrated in 2012 from its founders, CEO Chris Cole and Jim McCarthy, the president and chief operating executive officer, respectively, for what Intelligrated said was more than $500 million. Cole and McCarthy, who started the company in 2001, had retained an ownership stake and continued to lead the company after selling it to Permira.
Honeywell said Intelligrated should generate sales of about $900 million in 2016. Honeywell said the purchase price is about 12 times Intelligrated's earnings before interest, taxes, depreciation and amortization (EBITDA).
The deal is expected to close by the end of the third quarter.
Intelligrated makes automated systems and robots for conveying and palletizing for material handling and distribution of a wide range of products, including retail consumer products, food and beverage, apparel, converted paper, pharmaceutical, postal distribution and airport baggage handling. The company also makes automated storage and retrieval systems.
According to Honeywell, over the past three years, the company has grown at a compounded annual growth rate of about 13 percent, which is faster that the industry sector overall.
Intelligrated employs more than 3,100 in facilities in the United States, Canada, Mexico, Brazil and China. The company's four manufacturing operations are in Ohio, Missouri and Kentucky.