Honeywell Expects Acquisition of Elster to Close in 2015

Honeywell today announced that all necessary regulatory approvals have been received for its acquisition of the Elster Division of Melrose Industries plc and it now anticipates to close the transaction on December 29, 2015.

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  • Global Leader in Gas Heating, Controls, Metering, and Advanced Technologies
  • Expected to Add ~$1.8 Billion in Annualized Sales
  • Creates New Platform for Organic and Inorganic Growth
  • $5.1 Billion Transaction Announced in July 2015 Closes Earlier Than Anticipated

Honeywell (NYSE: HON) today announced that all necessary regulatory approvals have been received for its acquisition of the Elster Division of Melrose Industries plc and it now anticipates to close the transaction on December 29, 2015. Elster is a leading provider of thermal gas solutions for commercial, industrial, and residential heating systems and gas, water, and electricity meters, including smart meters and software and data analytics solutions. The acquisition, which Honeywell announced on July 28, 2015, closed earlier than anticipated following approval by Melrose shareholders and required regulatory approvals, including those in the U.S., European Union, and China.

“The acquisition of Elster adds outstanding technologies, strong well-recognized brands, energy efficiency know-how, and a global presence to the Honeywell portfolio,” said Honeywell Chairman and CEO Dave Cote. “We see Elster as a great opportunity to deploy HOS Gold to drive new growth and greater profitability in each of Elster’s businesses. This acquisition is expected to generate strong future returns for our shareowners, consistent with what you have come to expect from Honeywell.”

Elster’s gas heating and gas, water, and electricity metering businesses will be integrated with Honeywell’s Environmental & Energy Solutions business (E&ES), part of Honeywell Automation and Control Solutions. Elster’s upstream and midstream gas applications businesses will be integrated with Honeywell Process Solutions, within Honeywell Performance Materials and Technologies.

There is no change to the Company’s 2015 or 2016 financial guidance provided on December 16 as a result of the announcement.

Environmental & Energy Solutions

• Elster’s water and electricity metering business, along with part of its gas business, will become part of Honeywell’s Environmental & Energy Solutions (E&ES) business, a global business that produces residential and commercial building controls that help keep millions of homes, commercial buildings and industrial facilities comfortable and energy efficient.
• E&ES is a global business unit of Honeywell Automation and Control Solutions. E&ES is comprised of six businesses: the global industrial and commercial thermal combustion business, and five regional businesses: Americas, Europe, Greater China, Asia Pacific and Middle East, Turkey and Africa (META), which provide residential, commercial and air and water products and solutions to customers in their respective regions.

Quote from Tim Darkes, president, Honeywell Environmental & Energy Solutions:

“I would like to welcome Elster employees to Honeywell Environmental & Energy Solutions. Elster brings outstanding people, technology and a global base of utility customers to augment Honeywell’s energy, home and buildings products and solutions. Together, our common goal is to continue to introduce innovative new products for our customers, and leverage our global scale and broad portfolio to drive growth around the world.”

Honeywell Process Solutions

• Elster’s products and technologies complement HPS’ strong position in the natural gas sector. The new expanded line of products includes ultrasonic and turbine meters, electronic volume correctors, gas chromatographs, flow computers, regulators and pressure reducing stations for the gas transmission and distribution industry.
• The combination of the two companies’ products will help deliver the best technology from the joint know-how and experience of two industry leaders, providing its customers around the globe with a more robust and comprehensive line of technologies and products to help them better manage their operations.

Quote from Vimal Kapur, President of Honeywell Process Solutions:

“We are very pleased to welcome Elster’s employees to Honeywell. Elster’s wide range of fully-connected gas metering products and solutions, will complement and expand HPS’ industry-leading portfolio for natural gas transmission, distribution and storage. Elster is joining a global leader in Honeywell which has significant global resources that will help it grow and continue to innovate. Customers of both Honeywell and Elster will benefit from the strength and technologies of the expanded line of products, services and solutions.”

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