Honeywell [HON] yesterday said it has agreed to acquire EMS Technologies, Inc. [EMLG] for $491 million in cash in a deal that will enhance its capabilities for mobile computing and satellite communications and in electronic warfare systems.
EMS, which is based in Georgia, serves the aviation, defense, space, global asset tracking and rugged mobile computing markets. The company expects to have between $385 million and $405 million in sales this year and be profitable. EMS had $355.2 million in sales last year.
Honeywell said the deal bolsters its capabilities in certain growth markets.
“EMS is a terrific addition to Honeywell, adding leading positions in attractive markets that are closely aligned with favorable trends in the growing C4ISR space and commercial aerospace, as well as being highly complementary to our existing Scanning and Mobility business,” Dave Cote, Honeywell’s chairman and CEO, said in a statement. “The acquisition brings engineering expertise, differentiated technologies, global reach and profitable adjacent segments that build upon our great positions in good industries and enhance our growth profile.”
In the aerospace arena, Honeywell said that EMS will significantly add to its satellite communications capabilities, an area the company believes demand will continue to increase. With EMS, Honeywell plans to offer enhanced air traffic capabilities for polar and oceanic routes to enable improved fuel savings and operating efficiencies, a Honeywell spokesman told Defense Daily.
EMS also has aviation products such as terminals, antennas, in-cabin network devices, and rugged data storage.
In the area of mobile computing EMS adds new products to Honeywell and channel partners and entry into the warehousing and port markets. Its products in the area of supply chain logistics and mobile workforce management include rugged handheld and vehicle-mounted computers with multiple radio technologies, satellite-based global tracking and monitoring solutions for cargo, fleet assets and personnel.
Despite a few cents of earnings dilution stemming from acquisition related costs, Honeywell maintained its earnings guidance for 2011 and expects the deal to be accretive in 2012.
Honeywell is paying $33 per share for EMS, representing a 33 percent premium above the company’s closing stock price on June 10 and a 59 percent premium to its stock price in April when EMS announced it was pursuing strategic alternatives.
The transaction is expected to close in the third quarter of 2011. Bank of America was EMS’ financial advisor on the deal.