Honeywell Buying EMS Technologies for $491M

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Tim Mahoney. Credit: Honewell photo

PARIS — Honeywell expects to raise its profile in satellite-based asset tracking and satellite telecommunications equipment with its $491 million, all-cash purchase of EMS Technologies, Honeywell announced June 13.

The deal has been approved by Atlanta-based EMS’s board of directors and is expected to close by September, Honeywell said.

The sales price represents a 33 percent premium over where EMS stock was trading June 10 and a 55 percent premium over where the stock stood April 18, when EMS announced it was seeking a buyer.

Whether the announced price, which is net of EMS’s cash on hand, will satisfy EMS shareholders is unclear. While one activist shareholder, MMI Investments LLP of New York, had battled EMS management on behalf of a strategic transaction, others threatened lawsuits when EMS announced it would look at possible buyers.

“This transaction is the best way to maximize value for our shareholders,” EMS Chairman Jack Mowell said in a June 13 statement on the Honeywell purchase.

EMS makes satellite antenna and beam-management systems, aeronautical satellite communications gear and personal satellite-tracking hardware. It reported $355.2 million in revenue in 2010.

Recent contracts include on-board gear for the Wideband Global Satcom X- and Ka-band satellite system for the U.S. Air Force, for which Boeing is prime contractor; and for the Iridium Next constellation of low-orbiting mobile communications satellites. EMS will provide switches for the 81 Iridium Next satellites under a contract with Iridium Next builder Thales Alenia Space of France.

“EMS is a terrific addition to Honeywell, adding leading positions in attractive markets that are closely aligned with favorable trends in the growing Command, Control, Communications, Computers, Intelligence, Surveillance and Reconnaissance (C4ISR) space and commercial aerospace, as well as being highly complementary to our existing scanning and mobility business,” Honeywell Chief Executive Dave Cote said in a June 13 statement.

Tim Mahoney, chief executive of Honeywell Aerospace, said: “Combining EMS products into our aerospace business means that Honeywell can now deliver the next big leap in satcom technology, a key growth area for aerospace.”