The U.S. Federal Trade Commission (FTC) has finally given a green signal to diversified industrial goods manufacturer Honeywell International Inc.’s (HON) acquisition of mobile computing device maker Intermec, Inc. (IN). The acquisition was originally approved by the European Union in June and was stuck due to pending regulatory approvals by FTC. The $603.4-million transaction was cleared on the condition that Honeywell will license some Intermec patents to one of its rivals in barcode scanner to ensure a competitive market.
Headquartered in Everett, Wash., Intermec manufactures radio frequency identification (:RFID) readers, pressure-sensitive bar code labels, thermal transfer ribbons, RFID smart labels, as well as fixed, desktop, and portable barcodes. Two-dimensional scan engines translate barcodes into digital data for computers, which are then used by retail stores, kiosks and rugged mobile handheld computers to interpret and analyze.
Post-acquisition, the FTC mandate will require Honeywell to license patents that are used to make two-dimensional bar code scanners to Intermec’s competitor, Italy-based Datalogic SpA, for the next 12 years. This would enable Datalogic to foray into the U.S. market and restore the competitive market lost due to the merger.
Based in Morris Township, N.J., Honeywell manufactures a wide range of aerospace products and services, control, sensing and security technologies for buildings, homes and industry, turbochargers, automotive products, specialty chemicals, electronic and advanced materials, process technology for refining and petrochemicals and energy efficient products and solutions for homes, business and transportation.
Honeywell organizes its business into four operating segments – Aerospace, Automation and Control Solutions, Performance Materials and Technologies, and Transportation Systems. Honeywell’s diversified business portfolio mitigates operating risks and enables it to earn consistent above-average returns.
Honeywell currently has a Zacks Rank #3 (Hold). Other players in the industry worth mentioning include ITT Corporation (ITT) and Federal Signal Corp. (FSS), both carrying a Zacks Rank #2 (Buy).