Honeywell announced that it has signed a definitive agreement to acquire the Elster Division of Melrose Industries, a 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, for approximately USD 5.1B. Elster also manufactures flow computers and regulators for the gas industry. Elster consensus sales for 2015 are estimated to be USD 1.8B. The price translates to approximately 12.6 times Elster’s estimated 2015 consensus earnings before EBITDA, and the acquisition is anticipated to occur in the first quarter of 2016.
“The acquisition of Elster will generate strong future returns for Honeywell’s shareowners because it increases our growth profile globally – creating both organic and inorganic growth opportunities – and because Honeywell can run this company effectively and accelerate its growth through our complementary technologies, software knowledge, and presence in High Growth Regions”, said Honeywell Chairperson and CEO Dave Cote. “Elster has outstanding technologies, brands, energy efficiency know-how, and global presence, all of which we are very well-positioned to build on. Elster also creates a new platform for acquisition targets for Honeywell that will be additive to the business’ growth and global presence. We will see immediate benefits to Honeywell.”