Honeywell Bolsters Gas, Energy Businesses With Acquisition

Honeywell has completed its $5.1 billion acquisition of the Elster Division of Melrose Industries, a move that is expected to add about $1.8 billion in annualized sales. Honeywell also expects the purchase to boost its position in the natural gas sector as well as its energy, home and buildings business.

Elster provides 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.

“The acquisition of Elster adds outstanding technologies, strong well-recognized brands, energy efficiency know-how, and a global presence to the Honeywell portfolio,” said Dave Cote, Honeywell’s chairman and CEO. “We see Elster as a great opportunity to deploy HOS Gold to drive new growth and greater profitability in each of Elster’s businesses.”

Melrose acquired Elster in 2012 and reorganized the group into three separately managed business units: Elster Gas, Elster Electricity and Elster Water. It added to Elster Gas’s combustion product range with an acquisition in late 2014 of Eclipse, which makes gas combustion components and systems for industrial heating and drying applications.

Now the Elster businesses and products will be integrated into a couple different business units within Honeywell. Elster’s gas heating and gas, water, and electricity metering businesses will be integrated with Honeywell’s Environmental & Energy Solutions business (E&ES), part of Honeywell Automation and Control Solutions. Elster’s upstream and midstream gas applications businesses will be integrated with Honeywell Process Solutions (HPS), within Honeywell Performance Materials and Technologies.

Elster’s products and technologies will expand HPS’s line of products for the natural gas sector. The new line includes ultrasonic and turbine meters, electronic volume correctors, gas chromatographs, flow computers, regulators and pressure reducing stations for the gas transmission and distribution industry.

“Elster’s wide range of fully connected gas metering products and solutions will complement and expand HPS’s industry-leading portfolio for natural gas transmission, distribution and storage,” said Vimal Kapur, president of HPS. “Customers of both Honeywell and Elster will benefit from the strength and technologies of the expanded line of products, services and solutions.”

Honeywell was able to get approval from Melrose shareholders and international regulatory approvals a little quicker than expected. The acquisition closed just ahead of the first quarter 2016 closing originally expected when Honeywell announced the definitive agreement in late July.