December 10, 2012
Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of Intermec (NYSE: IN ) surged 23% today after manufacturing giant Honeywell International (NYSE: HON ) agreed to buy the automated identification and data collection specialist for $603.4 million.
So what: The all-cash deal values Intermec at $10 per share and represents a 25% premium over its closing price on Friday. Honeywell is making the move to boost its scanning and mobile computing business, as well as to enter the radio frequency identification, voice recognition, and bar code printing space, opening up several new avenues of growth going forward.
Now what: The transaction is expected to close by the end of the second quarter 2013 and be accretive to Honeywell's earnings in 2014. "Intermec has extensive engineering capability and broad sales reach that we look forward to integrating into our existing organization in an effort to build a leading position in the [automatic identification and data capture] marketplace," said Honeywell Automation CEO Roger Fradin. "Once again, our world class acquisition integration process will deliver value to shareholders." So while Intermec shares are likely all popped out, Honeywell's new growth opportunities might help drive some outsized gains over time.
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