Honeywell in $1.2 billion deal for safety-gear maker
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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)
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