Honeywell to buy Hand Held Products

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Thursday, October 18, 2007

MORRIS TOWNSHIP, N.J.--Honeywell International on Monday announced an agreement to acquire Hand Held Products, a privately held automatic identification and data collection company based in Skaneateles Falls, N.Y., for roughly $390 million. The company will become a part of Honeywell's Security Group, within the Automation and Control Solutions business.
"At the present time," said Ben Cornett, president of Honeywell Security, "we will run Hand Held the way it has been run in the past," meaning it will not yet be integrated into the security business. Kevin Jost, president and chief executive officer of Hand Held will continue in his role guiding the company. "We think that Honeywell for Hand Held Products is just an awesome owner for this business," said Jost. "They have a commitment to the customer first, their technologies in wireless and imaging we think are pervasive across both our businesses, and we're very proud to bring Honeywell to our community. We expect to grow this business rapidly." Hand Held has sales of roughly $285 million in 2006.
Cornett said Honeywell was attracted to Hand Held for a number of reasons, first among them that it allows the company to enter a new space: bar code scanners and rugged mobile, wireless computers that are used for asset-tracking, logistics execution and supply-chain management. Also, he said, Honeywell feels Hand Held's Adaptus imaging technology is superior to traditional laser-based technology in the space. Not to mention, "the industry as a whole, the space they play in, is growing at three times [gross domestic product], [and] the operating margins are substantial."
In the near term, Cornett doesn't believe current Honeywell dealers will become resellers of the Hand Held technology--"We have no intention at this time to even offer that," he said--rather, he said many of Honeywell's larger dealers "could benefit from the use of the product, become actual customers of Hand Held," he said. "We also see customers within Honeywell. We've used this technology within Honeywell from competitors of Hand Held's and we'll be taking a long look at using Hand Held Products internally."
Jost said his company's sweet spot is "the ability to read and scan a bar code; there are so many different languages and approaches to reading a bar code--we're just the experts at that."
Both Cornett and Jost agreed Hand Held resellers are sophisticated integrators, with professional services abilities, software design abilities, and strong project management skills. "The good ones," Jost said, "align themselves with one or two verticals, become an expert in use cases and applications within those verticals ... and they get to know the work flow, the problems of the customers. Then they work with us to develop in aggregate a unique set of hardware and software connectivity solutions, so that we can invest once and sell many ... When done well, we drive enormous return on investment for end users."