Honeywell acquires supply chain automation company in $1.5B deal

Honeywell International Inc. just announced that it has officially acquired Intelligrated, a supply chain and warehouse automation company, in a $1.5 billion deal - about 12 times the estimated value of Intelligrated's 2016 sales. The driving force fueling this decision is the rapid acceleration of e-commerce, which has put pressure on organizations to enhance fulfillment capabilities. 

According to the report, the agreement is supposed to be finalized before the third quarter comes to a close. Once it is, Intelligrated will join Honeywell's Automation and Control Solutions sector, Sensing and Productivity Solutions, or S&PS.

"E-commerce continues to grow at an unprecedented rate and customer demands for faster delivery times have created a need for warehouse, logistics and fulfillment solutions that can increase productivity and lower costs for our customers," Honeywell Automation and Control Solutions President and CEO Alex Ismail stated. "This acquisition fits with our vision for a connected industrial company and a connected worker."

Investing in innovation
The core of the Ohio-based company is centered on the designing and manufacturing of warehouse, distribution and fulfillment automation software. This move, then, is aimed at helping Honeywell improve its supply chain efficiency, enhance productivity and help uncover cost-savings opportunities for retailers and logistics suppliers. According to the press release, Intelligrated has seen significant growth over the past few years, with a compound annual growth rate of 13 percent since 2013. 

Through the acquisition, Honeywell will also have access to its robust customer base, currently composed of major retailers, consumer product businesses and global logistics providers. The addition of various applications and technologies will allow workers to elevate their productivity and performance.

According to The Wall Street Journal, some of Intelligrated's customers include United Parcel Services Inc., Nordstrom Inc. and Inc. Furthermore, prior to the acquisition, Honeywell announced that, in March, its chief executive would be leaving his role after 14 years. Amid these changes, its stock increased 1 percent and is currently 14 percent higher than it was last year.

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