Honeywell, Nortek, Tyco, United Technologies Corp. and ADT are some of the biggest names in security and home automation. And they've all been talking about mergers and acquisitions lately.
Most recently, Honeywell (NYSE: HON) and United Technologies Corp. (NYSE: UTX) have been in the news.
Earlier this week, UTC said it held merger discussions with competitor Honeywell, which would bring those two companies’ combined sales to $94 billion. That potential merger appears doomed because it “would face insurmountable regulatory obstacles and strong customer opposition,” said UTC in a statement Monday. But talks continue.
While UTC and Honeywell are quite diversified, both are giants in the home-technology space, with Z-Wave enabled security, energy management and home automation systems. Honeywell's home-technology solutions are sold under its Automation and Control Solutions (ACS) unit, while UTC sells home-control systems under its Interlogix (security, automation), Carrier (HVAC) and Kidde (fire) subsidiaries.
Both companies also have their own SHaaS (smart home as a service) platforms under the Honeywell Total Connect and Interlogix UltraSync brands. Interlogix acquired its platform, previously known as Ultra High Speed, from Australia-based Hills Limited in 2014.
Now, just a few days after the report of a Honeywell/UTC merger, the Wall Street Journal is reporting that Honeywell is shopping its Building Solutions group, the facilities-management wing under Honeywell's Automation and Control Systems (ACS) division (see division breakdown below).
According to the WSJ, Honeywell began gauging interest in the Building Solutions unit three months ago. The report says the unit could be worth between $3 billion and $4 billion.
It is unclear whether Honeywell would sell its building-solutions business if it ended up merging with United Technologies, according to the report.
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M&A Activity in Security and Home Automation
If you're keeping score, here's the latest M&A tally among big security and home automation firms.
2/2016 – WSJ reports that Honeywell is shopping its Building Solutions unit, after it appears antitrust concerns might thwart a merger with UTC.
2/2016 – CNBC reports that Honeywell and UTC were in merger talks in the “last two weeks” but UTC pulled out on antitrust concerns over their respective aerospace businesses. But talks continue.
2/2016 – ADT, which spun off from Tyco in 2012, announced it would be sold to Apollo Global Management in a $7 billion deal that would combine ADT with Protection 1. Here's what security-industry analysts have to say about that.
1/2016 – Johnson Controls Inc. and Tyco agree to a merger reportedly valued at $20 billion, which would create an industrial conglomerate with annual revenue of $32 billion. Hillary Clinton blasts the “inversion merger,” which would allow JCI to avoid paying $150 million in annual taxes by moving its headquarters to Cork, Ireland.
10/2015 – Nortek (Nasdaq: NTK), a competitor of both UTC and Honeywell, was reportedly in talks to be acquired by UTC. And then they weren't.
Who's left? Napco Security Technologies, Inc. (Nasdaq: NSSC), a leading independent provider of security systems and home automation systems under the iBridge brand.
Honeywell Business Units
1. Aerospace
2. Automation and Control Systems
- Scanning & Mobility
- Sensing & Control
- Industrial Safety
- Fire Safety
- Honeywell Building Solutions
- Environmental and Combustion Controls
- Honeywell Security Group
3. Performance Materials and Technologies
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