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Peter A. Sokoloff & Co. regularly analyzes transactions which occur within the industries covered. An archive of these case studies is kept online as a courtesy to our colleagues. To receive by e-mail new case studies as they are prepared, please e-mail [email protected] with your contact information.

Archives > Transaction Case Study 56

SOKOLOFF & COMPANY CASE STUDY Honeywell to acquire EMS Technologies 

BUYER:   Honeywell (NYSE: HON)
SELLER:  EMS Technologies (NASDAQ: ELMG) 
PURCHASE PRICE: $491 Million, net of cash (Enterprise Value) 
FORM OF PURCHASE PRICE:  $33 per share in cash

SELLER’S FINANCIAL INFORMATION AND M&A MULTIPLES

Year 2009 2010 Trailing Twelve Months
Year Ending
July 2, 2011

Revenue

$360M

$355.2M

357.36M

EBITDA

$35.7M

$40.3M

38.85M

Cash

 

 

71.50M

Debt

 

 

39.54M

Purchase Price

 

 

491M

Enterprise Value

 

 

491M

Multiple of Revenue

 

 

1.37

Multiple of EBITDA

 

 

12.64

TRANSACTION DRIVERS
This acquisition enhances Honeywell’s existing capabilities in rugged mobile computing technologies and satellite communications within its Automation & Control Solutions and Aerospace businesses.  It also strengthens their core mobile computing business and expands their addressable market with new products, channel partners and entry into the warehousing and port segments.  Honeywell believes these segments will be growth drivers for the business.  Lastly, the combination of EMS products into their Aerospace business means that Honeywell can now deliver the next big leap in satcom technology, a key growth area for aerospace.

SOKOLOFF COMMENTARY:
Press releases and corporate comments about the acquisition did not reveal some apparent synergies for Honeywell’s security portfolio.  EMS solutions such as asset tracking and high volume logistics support have broad applicability to critical security applications.  While EMS has deployed solutions in the defense arena, the acquisition should also have a positive impact on Honeywell’s Security Group.

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