Honeywell signed a definitive agreement to acquire Datamax-O’Neil (D-O) on December 18, 2014 for $185 million, with the transaction expected to close in the first quarter of 2015 subject to regulatory approval. Ok, so we knew D-O was a prime acquisition target (see our blog). But, we did not see this coming, having expected Datalogic to snap up the company all along. Honeywell acquired Intermec Technologies in a similar end-of-the-year deal back in 2012, and we have since speculated what their plans were for the company’s printer business. This latest acquisition only serves to cement Honeywell’s commitment to the barcode printer market.
D-O has successfully competed against the likes of Zebra and Intermec for several years now, carving its own niche in the manufacturing and logistics markets. However, the company has seen significant sales growth slowdown in the past 24 months, with its 2013 performance in the printer market staying relatively flat as compared to 2012. To combat the trend, this division of the highly diversified manufacturing conglomerate Dover Corporation, has also focused its efforts on a broad-based reorganization of its top management, as is evident by the company’s recent appointments to head up its Stationary Printers, Portable Printers, ad Supplies business units. VDC believes D-O’s executive management deemed it necessary to make these changes as it was faced by revenue stagnation while also underperforming the overall market. This had a negative impact on its R&D spending and product development, which have been D-O’s strong suit in the highly commoditized printer market. Being a part of a broader AutoID-focused organization could certainly help the company achieve its growth targets.
While this acquisition unquestionably strengthens Honeywell’s printer and supplies portfolios, the company has its work cut out for it as it looks to integrate the D-O brand into its own, a task Honeywell is very well-versed with. Will it follow an approach similar to the one it has going for Intermec’s printer line (Intermec by Honeywell)? Or will we see D-O’s offerings fully integrated with Intermec given the similar markets that these brands target? We will know soon enough.