Honeywell Buys Videofied Brand for $123 Million, Drops UTC Merger Pursuit
The video motion detection alarm verification leader will become part of Honeywell’s Security and Fire unit.
MELVILLE, N.Y. — Honeywell has acquired privately held RSI Video Technologies (RSI), a leading provider of intrusion detection systems for commercial and residential security applications under the brand Videofied, for approximately $123 million.
RSI’s wireless battery-powered motion detectors with built-in cameras deliver live, high-quality video over the cloud to central monitoring stations and end users. The acquisition enhances Honeywell’s ability to meet the increasing global customer need for video verification, and it also brings a unique do-it-yourself (DIY) offering combined with professional monitoring.
“RSI complements Honeywell’s industry-leading security portfolio, and brings significant new technology and software that provides added value to our security dealers and channel partners,” says Alex Ismail, president and CEO, Honeywell Automation and Control Solutions (ACS).
“The industry has been looking for ways to reduce the burden on local law enforcement resources responding to false alarms,” says David Paja, president of Honeywell Security and Fire. “RSI helps reduce false alarms by providing cost-effective indoor and outdoor video verification solutions to dealers and central monitoring stations.”
Founded in 2000 and based in Strasbourg, France, with key operations in Minnesota, RSI has one of the largest installed bases of video-verified alarm systems in the world, with in excess of one million installations in more than 60 countries. It has approximately 110 employees in France and the United States.
RSI will become part of Honeywell Security and Fire, a business unit of Honeywell ACS.
Honeywell Drops UTC Merger Pursuit
Honeywell also announced on Tuesday that it is no longer pursuing a strategic combination with United Technologies due to their unwillingness to engage in negotiations. Honeywell says it was interested in a combination because it saw compelling value creation for both sets of shareholders and a readily executable transaction due to two largely complementary business portfolios.
According to a press release, Honeywell strongly disagrees with United Technologies’ characterization of the regulatory and customer risks associated with the transaction.
“We remain confident that the regulatory process would not have presented a material obstacle to a transaction. United Technologies felt the same way as we do when they approached us in May 2011 and in April 2015,” the press release read. “In our approach to their Chairman and their CEO on Feb. 19, 2016, we had hoped to continue amicable and quiet discussions of a combination. In fact, we were told by them during the meeting that such a combination would be fabulous, they would take it very seriously and they would get back to us with questions within a week in anticipation of their upcoming Board meeting.
“Both companies have agreed in the recent past that the industrial logic was compelling in a very doable transaction.”
“From both an industrial logic and shareholder value perspective, Honeywell and United Technologies are a great match and that is why the two companies have been talking about a combination for more than 15 years,” said Honeywell Chairman and CEO Dave Cote. “We made a full and fair offer that would have greatly benefitted both sets of shareowners. Considerable value would have been added through the $3.5 billion of very achievable cost synergies (6% of UTX sales, 4% of total sales) and application of Honeywell management practices, especially our extensive software capability and cost management that would support needed product reinvestment. It also would have created the opportunity to construct an excellent core growth portfolio. However, continuing to try to negotiate with an unwilling partner is inconsistent with our disciplined acquisition process.”
United Technologies issued the following statement in response to the news: “This is the appropriate outcome given the strong regulatory obstacles, negative customer reaction and the potential for a protracted review process that would have destroyed shareholder value.
“UTC will remain laser focused on our key priorities — program execution, innovation, cost reduction and disciplined capital allocation. Our outlook remains strong and our industry-leading franchises are well positioned to deliver strong earnings growth and create shareholder value well into the future.”
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