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At VDC, we have now, in a way, come to expect big acquisition-related news towards the end of calendar years – case in point, Datalogic’s acquisition of Accu-Sort and SMARTRAC N.V.’s acquisitions of UPM, KSW and Neology in Q4, 2011. Throughout 2012, VDC has talked about how we expect to see leading players in the space – for both barcode scanners and printers – to consider consolidating their competitive landscape and strengthen their leadership position in existing markets while also tapping into adjacent high-growth market opportunities. On December 10th, 2012, Honeywell International Inc. (NYS: HON) did just that – announcing its acquisition of one of the global leaders of AIDC solutions, Intermec (NYS: IN), for approximately $600 million in an all-cash transaction. Intermec is the only company involved in the development, manufacture, sale and integration of all core AIDC technologies (barcode scanners, barcode printers, RFID, rugged mobile computers, etc.), thereby giving enterprises with AIDC solution requirements a “one stop shop” alternative. Our focus in this blog post will be on highlighting the impact of the company’s acquisition on the barcode and RFID markets.
From a strategic perspective, some of the key benefits that Honeywell can leverage via this acquisition include:
Despite all these synergies, VDC expects Honeywell to face stiff challenges as it looks to revive Intermec’s financial performance in its key markets – across regions, verticals and technology segments – and minimize the revenue impact of economic volatility in Europe. The company has, however, been very active with new product introductions across its barcode scanning and printing portfolios over the past 6-12 months, showcasing a continued focus on research and development initiatives.
The deal is a very strategic move by Honeywell and certainly shakes up the competitive landscape in the AutoID market. The addition of Intermec’s large installed base of customers and channel partners to its own positions the company for continued success in increasingly difficult and demanding operating conditions. Questions remain on what this means for Intermec’s employees, product lines and channel. And we will have the answers for you once this acquisition closes out in 2013.