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Buyer found for Everett's Intermec

Honeywell International Inc. will buy the stuggling firm for $603.4 million in cash.

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By Michelle Dunlop
Herald Writer
Published:
EVERETT -- Intermec Inc., which makes barcode printers and radio frequency identification products, said Monday that it reached a deal to sell itself to Honeywell International Inc. for about $603.4 million in cash.
"We are pleased that Honeywell recognizes and values the capabilities as well as the strategic potential of our business," Allen J. Lauer, Intermec's chairman and interim chief executive, said in a statement.
Lauer said the deal with Honeywell stemmed from a thorough review of the Everett-based company's businesses by its board, with the goal of determining the best possible overall outcome for shareholders.
Recently, Intermec has struggled. Lauer stepped in as interim CEO earlier this year when the company's chief, Patrick Byrne, left after Intermec reported a first-quarter loss of $242.1 million. Since then, Intermec announced a restructuring plan that cut about 170 jobs worldwide. In light of the deal, Intermec said, it's suspending a previously announced search for a permanent chief executive.
Once the largest publicly owned company based in Snohomish County, Intermec employed 2,200 people in 65 offices around the world in 2011, including about 400 employees in Everett.
Nikolett Bacso, a spokeswoman for Intermec, declined to say how many people currently work for the company. She also declined to speculate on how the deal with Honeywell will affect employees in Everett.
Honeywell, a technology and manufacturing company based in New Jersey, will pay $10 per share for Intermec. Based on the company's about 60.3 million outstanding shares, the deal is worth about $603.4 million. Intermec valued it at about $600 million, net of cash and debt acquired.
The price represents a 25 percent premium over Intermec's Friday closing stock price of $7.98. Intermec shares shot up $1.85, or 23 percent, to close at $9.83 on Monday.
Intermec, which employed as many as 700 people in Everett eight years ago, isn't a stranger to acquisitions or name changes. Formed in 1966 as Interface Mechanisms, the company didn't adopt its now-familiar name of Intermec until 1982.
After being acquired in 1991 by Litton Industries, Intermec's ownership was passed around various subsidiaries until landing with California's UNOVA in 1997. UNOVA ultimately relocated and took on the more well-recognized Intermec name in 2006.
Intermec, like Honeywell, also has snatched up several companies and technologies -- for instance, buying radio frequency identification technology from IBM. Most recently, Intermec purchased Vocollect, which specializes in voice recognition and mobile computing devices.
Honeywell said the addition of Intermec will strengthen its core scanning and mobile computing business, while also opening up new opportunities in radio frequency identification, voice recognition and barcode and receipt printing markets that it currently doesn't serve.
Analysts were mostly upbeat about Honeywell's decision to buy Intermec.
Buying Intermec "is exactly the kind of thing that you want management to do," said Steven Winoker, a New York-based analyst at Sanford C. Bernstein & Co.
Honeywell said it expects the acquisition to lower its 2013 earnings by 3 cents or 4 cents per share, but increase its profits the following year.
Honeywell makes products ranging from First Alert home security systems to automotive brake pads in its consumer division. It also provides products and services to the aerospace and defense, building and construction, energy, health-care, chemical and manufacturing sectors.
The agreement has been approved by the boards of both companies but remains subject to Intermec shareholder and regulatory approvals. The deal is expected to close by the end of the second quarter of 2013.
The Associated Press and Bloomberg News contributed to this report.
Story tags » EverettIntermec TechnologiesLocally Based Company

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