Honeywell CEO studies list of possible acquisitions
BY Staff and Wire reports
Saturday, February 09, 2013
2/09/13 at 4:59 AM
Honeywell International Inc. is evaluating about 100 companies as potential acquisition targets, with a focus on deals of less than $1 billion because they are easier to assimilate, CEO Dave Cote says.
While the prospects are valued at as much as $20 billion, Honeywell is unlikely to buy anything that big because it would risk integration challenges and paying too much, Cote told Bloomberg News.
"Stuff over $1 billion, then I start to get queasy," Cote said. "I like to acquire at a size that we can immediately Honeywell-ize it."
Since becoming CEO in 2002, Cote has acquired about 75 companies for $10 billion and sold $6 billion of unwanted businesses at Honeywell, whose products include thermostats and aircraft cockpit controls. Having a large pool of potential takeover targets gives the Morris Township, N.J.-based company the discipline to walk away from deals, he said.
Flawed deal-making, including the merger of Honeywell with Allied Signal Inc. in 1999 and the purchase of Pittway Corp. in 2000, led to company infighting, Cote said.
Honeywell in October completed the purchase of a 70 percent stake in Tulsa-based Thomas Russell Co., a seller of natural gas processing equipment, for $525 million and announced in December it will pay about $600 million for Intermec Inc., a maker of handheld electronic devices.
Honeywell CEO Dave Cote: "Stuff over $1 billion, then I start to get queasy. I like to acquire at a size that we can immediately Honeywell-ize it."