Honeywell drops UTC bid, buys Videofied for $123 million


Martha Entwistle

MELVILLE, N.Y.—In two separate announcements Honeywell today said it is no longer pursuing a merger with UTC, and it also said it has purchased video verification provider Videofied (RSI Video Technologies) for $123 million.

Founded in 2000, RSI is based in Strasbourg, France, and Minnesota. Videofield has more than 1 million systems installed worldwide, and 110 employees in France and the U.S., according to Honeywell.

RSI provides wireless battery-powered motion detectors with built-in cameras that transmit video over the cloud to central monitoring stations and end users.

Honeywell said the deal will help it meet the demand for video verification and bring “a unique DIY offering combined with professional monitoring.”

 “The industry has been looking for ways to reduce the burden on local law enforcement resources responding to false alarms,” David Paja, president of Honeywell Security and Fire, said in a prepared statement. “RSI helps reduce false alarms by providing cost-effective indoor and outdoor video verification solutions to dealers and central monitoring stations.”

In its announcement about the merger bid with UTC, Honeywell said it was suspending its bid “due to [UTC’s] unwillingness to engage in negotiations.”

UTC said last week that a merger between the two would not pass necessary regulatory approvals. Today, Honeywell said it “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.”

Honeywell also provided some information about the deal’s history, saying that UTC had approached Honeywell about a merger in May, 2011 and in April, 2015.

Honeywell said it approached the UTC chairman and CEO on Feb. 19 with hopes of continuing “amicable and quiet discussions of a combination.” The news release said “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.”

In a prepared statement Honeywell’s David Cote said, “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 percent of UTX sales, 4 percent 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.”

Cote continued, “we have a terrific growth story for standalone Honeywell that we look forward to sharing at our Investor Day on March 2.”  

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