Honeywell will pay 185 pence a share and assume about 300 million pounds of debt, chief executive David Cote said in a statement. Novar investors will retain a 6.6 pence dividend. Novar had faced a hostile takeover from Melrose, a smaller rival based in London. Novar executives had rejected the Melrose offer and had sought another buyer.
For Honeywell, based in Morristown, NJ, buying Novar will expand an automation and controls unit that contributes one third of sales and profit. "This acquisition is an excellent opportunity to further expand our Automation and Control Solutions business," said David M. Cote, Honeywell Chairman and CEO.
"Honeywell has a long heritage in providing premier integrated security, fire and building controls products and services. We see great opportunities in this business, and the integration of Novar's highly complementary products, services and expertise clearly enhance those prospects. Novar has a great heritage built on a competitive product offering, a talented workforce and a management team dedicated to delivering value to their customers. Adding these assets to Honeywell's already strong global technology platforms will deliver benefits for customers and expanded opportunities for employees of both companies. We look forward to working with Novar's management team to realize the benefits of this combination," Cote said in the statement.
Honeywell's automation and controls business, its second- largest after aerospace, has 40,000 employees, annual sales of about $8 billion and supplies products ranging from factory equipment to the thermostats and air-quality sensors used in so- called intelligent buildings.
Novar does almost two-thirds of its business in North America, where it has made acquisitions to add to the building- controls operation, whose products include fire detectors, plug sockets and light switches.
The Sunday Telegraph in London said that Honeywell had been one of four contenders for Novar, which included Siemens; Schneider Electric; and General Electric.