On July 29, Honeywell announced that it had signed a final agreement to acquire Elster from Melrose Industries Plc. Elster is a world leading enterprise providing gas solutions for commercial, industrial and residential heating systems, and specializing in the production of gas, water and electricity. On July 29, Honeywell announced the signing of the final agreement to acquire Elster from Melrose Industries Plc. Elster is a world leading enterprise providing gas solutions for commercial, industrial and residential heating systems, and specializes in the production of gas, water and power metering equipment, including intelligent metering instruments, software and data analysis solutions
according to the agreement, the acquisition cost is about US $5.1 billion. Elster also produces flow computers and regulators for the gas industry, and the company's sales in 2015 are expected to be $1.8 billion. The acquisition price is about 12.6 times Elster's estimated EBITDA in 2015, and the acquisition is expected to be carried out in the first quarter of 2016. The effectiveness of the acquisition agreement has yet to meet the customary closing conditions, and requires the approval of regulators and the voting approval of Melrose industries' shareholders
"the acquisition of Elster can bring high returns to Honeywell's shareholders in the future, because it can promote our business growth globally - creating endogenous and non endogenous growth opportunities, and Honeywell can accelerate its growth by effectively operating the company, as well as our complementary technology, software knowledge and business in high growth regions around the world." Dave cote, chairman and CEO of Honeywell, said. "Elster has outstanding technology, brand, energy efficiency professional experience and businesses all over the world, which are very consistent with us. Elster can also build a new platform for Honeywell's future mergers and acquisitions, and contribute to our business growth and global layout. We see that this acquisition can directly help optimize Honeywell's product portfolio, and this optimization benefit will be further amplified in 2016 and 2017. This will be a very valuable acquisition for Honeywell and our shareholders. "
"this acquisition also proves that we have strictly followed the company's M & A and integration process. This model is very suitable for us and very successful," Galway said. "In the past decade, we have completed more than 80 acquisitions, increasing sales revenue by about $12billion. In the future, we will continue to look for favorable acquisition opportunities to promote growth. We believe that the acquisition of Elster is a very good opportunity to further promote the implementation of the operation mode and the deployment of core internal processes of Honeywell's new material development team, which will help us achieve business growth and improve our global market The status of the field. In the long run, it can also bring good returns to shareholders. Honeywell operating system (HOS) will play a key role in creating new synergies, which will also help improve the growth and profitability of each business in Elster. "
Elster currently has about 6800 employees worldwide, mainly in the United States, Germany, Britain and Slovakia. The company currently has a huge customer base, and has installed more than 200million measurement modules in the global market in the past 10 years
"this acquisition also allows us to further increase customer value for industrial end users of Honeywell environmental automation department and process control department through advanced technology and life cycle management solutions," Galway continued. "Elster's gas business provides products with high demand among natural gas customers, which can bring a strong global distribution network and a large number of cross selling opportunities for existing Honeywell technologies and products, and help win new customers in developed country markets and high growth regions."
"Elster's gas, power and water measurement products have excellent reliability, safety and accuracy. Elster enjoys a high reputation in improving operational efficiency and meeting regulatory certification requirements for global utility customers. We expect that with the introduction of various energy efficiency improvement plans and regulations, as well as the increasing global demand for natural resource management, the measurement business of Honeywell 1 and fixture selection will be realized in the future Very meaningful and sustainable growth. In particular, as new intelligent technologies, software and data analysis are more and more widely used worldwide, the development of public utility measurement is also changing with each passing day. We expect this business to show a strong growth momentum in the world. Elster has differentiated technology and rich industry knowledge. Liquid crystal rubber tensile testing machine is an experimental machine for mechanical stress testing of metal and non-metallic materials, such as stretching, tightening, bending, shearing, tearing, stripping and other mechanical properties. It also maintains a good cooperative relationship with global utility customers. In addition, they occupy a dominant position in the field of strictly regulated heating, control system and measurement, This will be consistent with no need to set attenuation); Reduce the import force (load) and export load appropriately, and form a good complementary with our existing product portfolio. "
Honeywell's guidance range for the whole year of 2015 given in its second quarter financial report has not changed, and the company expects this transaction to have a slight dilution impact on its 2016 earnings per share
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