Honeywell sale could be windfall

Thursday, April 1, 2004

MINNEAPOLIS - With Honeywell planning to divest itself of its security monitoring division, the sale could turn out to be quite lucrative, according to an industry analyst.

John Mack of USBX Advisory Services said the alarm monitoring business commands more than a 40 times recurring monthly revenue multiple. Honeywell has about 140,000 accounts across the United States, 25 percent of which are residential accounts, included in the sale.

Industry sources have said that Honeywell recently entered into a third round of proposals for the sale, but Mark Hamel, a spokesman for Honeywell Business Solutions, would neither confirm or deny those reports.

“There are no new developments to report at this point,” Hamel said. He also declined to name companies that have shown interest, although United Technologies Corp., Siemens and Brink’s have been rumored to be among the bidders.

Speaking at Security Growth Conference in March, David Willett, TITLE for Honeywell, said the company decided to get out of the alarm monitoring business because it was not a focus for the company.

“We are moving away from being a direct-channel player,” Willett said, adding that Honeywell has already sold its Australian, Canadian, German and other monitoring businesses, with the U.S. business being the last piece remaining for divestiture.

Honeywell’s security monitoring business employs 850 people at its 40 branch locations in the United States.