Elster consensus sales for 2015 are estimated to be $ 1.8 billion. The price translates to approximately 12.6 times Elster's estimated 2015 consensus earnings before interest, taxes, depreciation, and amortization (EBITDA). The agreement is subject to customary closing conditions, including regulatory review and Melrose shareowner vote.
"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's portfolio, accelerating into 2016 and 2017. This is a great acquisition for Honeywell and our shareowners," said Honeywell Chairman and CEO Dave Cote.
Elster employs approximately 6,800 people with major locations in the United States, Germany, the United Kingdom, and Slovakia. The company maintains an impressive installed base with more than 200 million metering modules deployed over the course of the last 10 years alone.
"This acquisition will allow us to improve customer value with technologies and lifecycle management solutions for industrial end users served by Honeywell's Environmental Combustion and Controls and Process Solutions businesses," continued Cote. "Elster's gas business offers products in high demand among natural gas customers and brings a strong, global distribution network and numerous cross-selling opportunities for existing Honeywell technologies to new customers in both developed and High Growth Regions."
"Elster's gas, electric, and water meters are highly valued for their reliability, safety, and accuracy. Elster has a world-class reputation for delivering on the operational efficiency and regulatory certification requirements of utility customers globally. We expect that energy efficiency initiatives and mandates and the increased need for natural resource management will drive meaningful and sustained growth for Honeywell in the metering segment. Utility metering in particular is rapidly evolving as new 'smart' technologies and software and data analytics capabilities are becoming adopted around the world and we expect strong growth from this segment globally. Elster's differentiated technologies, extensive industry expertise, and relationship with utility customers globally – combined with their strong positions in the highly regulated heating, controls, and metering segments – are a great fit for Honeywell's portfolio," concluded Cote.
(Source: Honeywell International Inc.)