Honeywell in $1.2 billion deal for safety-gear maker
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Fri, 04 Apr 2008 16:09:07 GMT |
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By Scott MaloneBOSTON (Reuters) - Diversified manufacturer Honeywell International Inc said on Friday that it would buy Norcross Safety Products LLC, a maker of personal protective equipment, for about $1.2 billion to expand its safety business.Norcross, which is majority-owned by New York-based private equity firm Odyssey Investment Partners, makes respirators, helmets, protective gloves and shoes, and other gear for firefighters and industrial workers. The company had 2007 revenue of about $609 million."This acquisition provides Honeywell with a complete platform in a fragmented, global segment which is expected to yield substantial growth opportunities," Roger Fradin, chief executive of Honeywell's automation and control solutions group, said in a statement.Deutsche Bank analyst Nigel Coe, in a note to clients, wrote, "This is a deal consistent with (Honeywell's) M&A road map."Noting that Norcross generated $97 million in earnings before interest, taxation, depreciation and amortization in 2007, with $12 million in corporate expenses, he said he saw opportunities for Honeywell to cut costs as it absorbed the business."We would not expect there to be a material impact on earnings in 2008 but see the opportunity for modest accretion in 2009," Coe wrote.Oak Brook, Illinois-based Norcross will become part of Fradin's unit, Honeywell's largest and fastest-growing operation.The division, whose products range from home thermostats to systems that manage large industrial facilities, last year generated 36.1 percent of Morris Township, New Jersey-based Honeywell's $34.6 billion in revenue.The deal, which the companies expect to close in the second quarter, is subject to U.S. regulatory review.Odyssey acquired Norcross in July 2005 and beefed it up through a series of acquisitions, the private equity firm said.Honeywell shares were up 21 cents, or 0.4 percent, to $57.85 in late morning trade on the New York Stock Exchange.So far this year, they are down about 6 percent at a time when the Dow Jones U.S. diversified industrials index <.DJUSID>is about flat.(Additional reporting by Chelsea Emery in New York; Editing by Lisa Von Ahn and Tim Dobbyn) (c) Reuters 2008. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters and the Reuters sphere logo are registered trademarks and trademarks of the Reuters group of companies around the world.
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