Honeywell Trying to Sell Off Security Business

Author: Brian Karas, Published on Feb 25, 2016

The last several months have seen M&A activity in the security industry really picking up. Now Honeywell is getting in on the action by putting it's Building Solutions Business on the market. Contained within Building Solutions is a portion of Honeywell's security business.

Will Honeywell be able to join the multi-billion dollar M&A club, along with Tyco / JCI and ADT / Protection 1?

In this note, we break down Honeywell's financials, examine where the security business fits (or does not) and show what this means to the security industry.

*** **** ******* ****** **** **** *&* ******** ** *** security ******** ****** ******* **. *** ********* ** ******* ** on *** ****** ** ******* **'* ******** ********* ******** ** the ******. ********* ****** ******** ********* ** * ******* ** Honeywell's ******** ********.

**** ********* ** **** ** **** *** *****-******* ****** *&* club, ***** **** **** / *** *** *** / ********** 1?

** **** ****, ** ***** **** *********'* **********, ******* ***** the ******** ******** **** (** **** ***) *** **** **** this ***** ** *** ******** ********.

[***************]

WSJ ******* / ******* *******

*** *** *********** **** ********* ****. ** **********, **** **** $*.* ******* ******* *** **** segment ** ********* *** * ********* ***** ***** ** $* to $* *******.

*** ********* ******** *** ******* ** *** *** ******:

  • **** **** ** *********'* ******** ********** *** ***** **** ** Honeywell ****** *** ******** ********* **** * ******* ********: ******, Safety *** ******** **** ******** ********* & ************. *** *** names *** ****** (***) *** **** ** ******** ***** ** the ****** *******. ** ****, ** ** ******* ** *** of *** ******** ********* ***** ** **** ******** ** ** some ***** ****** ****** *********.
  • *** ***** ********* ***** ** ***** *** ******** ** *** revenue ********* (** **** **** *** ***** ****** *****) *****, if *******, ******* **** *** ********** ***** **** *** ***** likely ** *** ****** *** *** *******.

Financial ********

******** ******** *** ******** *** * ******** ***** ****** *** overall ********* ********, ************ **% ** **** ** ~$** ******* annual *****. *** ******* ******** ** ********* ($**.**), *** ******* $10 ******* *** *** *** *********** ********* *** ************ *******. Security ***** ** *** ***** ******* ** ********** / *******.

*** ***** ***** ****** **** ****:

Security ******* ****** *** *** ***

*********'* *** ******** **** **** ** ******** ***:

  • ****** ****** *** ********, ***** ** **** **** ******** ****** know ********* *** ******* **** ** ********, ****** **** ** ADI, *** ********* **** ** ** *** ********* **** ****-******** onto *** ********.
  • ******** ********* *** ************ ***** ******** ********* *** ********* / integrator ******** *********** ******** *********. **** **** ** **** ******* "************" **** *** ******** refer ** ***-***** ***** *******, *** ** *** **********, ******** and ***-******** ******* **** ********** ********* ********** * ***** ********.

The ******** ********* *** ************ ****

*** *** **** ** ********** ******* ** $*.* ******* *** compared ** ******* ***** ********* ******** ***-*****, *** *** *********** of ****$*-****** ***** ***** ******** **** ********* **** *** *** **** business ** ************ ********** ** ********** ** ***** ******* ********. This ** *** **********, ***** *** ****/*** *** ***/*********** *****. The ******* ******** **** **** ******* ******* ** ** **** large-scale ******* ** *** **********, ********* *** ******** ************** *******. The **** ***** ** *********'* **** ** ******** ** ****:

***** ***** ***** ** ***** *** ***** **** ***** ******* in ***** ** ***** **** *****, **** *** ********* **** time-consuming ** *** ***** ***** *** ******** ******* ** ****** as *** **** **** *****-***** ********* *** ***** ********, *** those **** ******* ***** ** *** ******** ******** ***** ********* systems **** ***** *********.

Energy ****** *** ********

********* ******* *** ****** ******** ******** **$* ******* ******, ****** ** ********** *** *** ******** ** **** ****** apparently ****** **** ***. ***** *** *** **** ******* ** be **** *** *** **** * **** ** *******, ** the *** **** **** *** ** *******, *** ********* ** the ********** *** ******* ********* ******** **** *********** ****** ** Honeywell's ******** *** *********** ***** *********** *******. **'* ******* ***** now ** *** ******** **** ** *** *** **** ** just ********* ********** ** *** *** ** ** *************** ******** segment, ** * **** ** ***** *** ***** ** **** core ************ *******. ***** **** *** ******** ** *** *** business ******* ** ** ********* ** (* ***********, *** ******** that ***'* ******* * *** ** ********* *&*), ** ***** be **** ** ******** ******* **** **** ** *** ****** as ****, ********** ** **** **** ** ***** ***** ** enhance ***** ***** *********.

********* *** **** ********** * ****** ** ******** **** ***** fall ** *** ****** ****** *** ******** *******, *** ****'** lost **** **** **** *** **** ******* ***** **** ********* like **** ******* *** ****** ***** ********* ************** ** **** **** ******** ** ********** ****.

The ****** ** ********* ********

********* ** *** * ***** ******* ********** **** ******** ** the ******** ** *** ****** *******. ***** ******** *********** ******** appears ** ** * ****** ********** ***** ** ***** ******* business, *** ***** *********-******* ******** ******** *** ****** * ********** of ***** ********* *******. *** ** ********* ******** ** ** away, *** ** ***** *** ** **** ** ******** * company **** ********* ****** * *** *** *** ** * means ** ************ * **** **** ** *** **.

Comments (17)

Aside from Siemens or Schneider, I can't think of the companies that would be interested in this.

I tend to agree with you. This isn't exactly a high growth or "cool" business unit.

OK, it's said Hikvision has got financial support from China Banks for 3B$ ? and Honeywell security is listed at 3~4B$ ?

Just a joke.

Honeywell reports its global security business at $3 billion annual, making it noteworthy and the majority of this income apparently coming from ADI.

Are Honeywell products not sold through other channels besides ADI?

ADI is reported at $1.8B in sales, which makes it the majority of the $3B number cited.

As for the actual channel for Honeywell-branded products I couldn't get a solid answer on this, though I'm still trying to reach out to a few contacts.

You can certainly buy Honeywell products at places other than ADI, for example: HD31WH-Camera but I suspect that product originally made it into the world via ADI.

I tend to agree with you. This isn't exactly a high growth or "cool" business unit.

I would agree with the business perspective and behind this statement. I don't think Honeywell Corporate is worried about the cool factor. Business growth is absolutely on their minds and the minds of their shareholders. That does not mean that this is still not an interesting, rewarding or cool career choice, perhaps more or better suited for smaller companies, and small business in particular. I reference this article I read yesterday as just one reason I have stayed in this industry for 30 years while being offered other opportunities. Speaking only for myself, there is more to life than money.

Mark -

Thanks for the comments. When I say that business unit is not "cool", I don't mean that the security industry in general suffers from exciting or "cool" career options, but rather that this specific Honeywell business unit does not have any particularly compelling value outside of the raw numbers.

As Scott points out above, there are most likely not a lot of companies that would be interested in picking this up from Honeywell. It's not a *bad* business (even though the numbers show it's not *great* either), it's just the security equivalent of shopping for new tires.

These tend to be the kinds of deals where the buyer acquires the business in order to strip back some costs, maybe combine it with another business unit, and wring some extra sales out of it. It's not going to be valued and bought for hopeful huge growth potential and speculation, it's going to be bought for a very precise and calculated value.

"Speaking only for myself, there is more to life than money."

Guess you haven't spent much time with conglomerate executives ;)

I have not in fact. And yes, that is funny.

In all seriousness, I do think the reason these conglomerate security divisions seems so dysfunctional is that the mindset is totally different than regular people. The conglomerate focus is maximizing short to mid term cash flow, so moves that seem destructive to customers and long term competitive positioned are viewed by them as value (i.e. profit) generating actions.

I wonder if the UTC layoffs weren't due to the expected merger, or maybe they are going rep firm again? Maybe they can merge with an Edinburgh company and gain some Tyco/JCI type tax savings?

Does this mean EBI might be going down the toilet where it belongs?

Wait, there are end users who still have EBI and haven't shot themselves yet?

Obviously ADI and video are a big part of Honeywell but the interesting thing to me is the mid to large access control business. Honeywell has for years been just dangling out there with ProWatch and WinPak. However, in the last 12 months I have a substantial number of clients either investing into the product by expanding it as their primary solution, or, are investigating it as one of the top three platforms. UTC seems to have alienated a lot of large end users and companies are asking for products that are not so proprietary. I don't know if this noise is translating to sales but I think there is a strong opportunity for Honeywell to strike by strengthening the sales engine. Otherwise, they should spin it or sell it in order to get out of its own way. Anyone else sensing similar trend of Honeywell access coming back in style?

Honeywell just acquired RSI Video (Videofied) this morning.

Ryan, we did a post on that here: Honeywell Acquires Videofied

My own opinion is a behemoth sized company that can't really compete with up and coming innovations because it can't move enough enough under it's own weight. So it is shedding a business to get what it can because margins thin out even further.

Don't misinterpret this as a strong criticism of Honeywell itself, but my own opinion of business physics from what I have seen when companies get to a certain size. We've done fairly well lately being the little company that could versus larger name competitors who just don't have that personnel level of interaction and service with their clients, or breadth of scope outside a basic cookie cutter solution.

Login to read this IPVM report.
Why do I need to log in?
IPVM conducts unique testing and research funded by member's payments enabling us to offer the most independent, accurate and in-depth information.

Related Reports on Sales

Avigilon Favorability Results 2019 on Jan 15, 2019
Since IPVM's 2017 Avigilon favorability results, the company was acquired by Motorola and has shifted from being an aggressive startup to a more...
Gorilla Technology AI Provider, Raises $15 Million, Profiled on Jan 15, 2019
Gorilla Technology is a Taiwanese video analytics manufacturer that recently announced a $15 million investment from SBI Group, saying this...
Arecont Costar Layoffs on Jan 14, 2019
Arecont Vision, a Costar Company, has laid off more than 10% of their workforce in a move the company described to IPVM as a result of "important...
CyberExtruder Face Recognition Profile on Jan 04, 2019
CyberExtruder offers 3D modeling face recognition software that they say provides quicker and more accurate matches than other 2D face recognition...
Last Chance - Security Sales Course 2019 on Jan 03, 2019
This is last chance to register for the IPVM sales course: This sales course is customized for the needs and challenges specific to...
European Startup Ajax Profile - They "Stand Against Evil" on Jan 03, 2019
European intrusion detection startup Ajax Systems proclaims: How are they standing against evil? And what are the differentiators and potential...
The Battle For The VSaaS Market Begins 2019 - Alarm.com, Arcules, Eagle Eye, OpenEye, Qumulex, Verkada, More on Jan 02, 2019
2019 will be the year that VSaaS finally becomes a real factor for professional video surveillance. While Video Surveillance as a Service (VSaaS)...
Qognify Acquires OnSSI, CEO Pitches Exciting Future on Dec 23, 2018
Qognify is a VMS / PSIM company, with a tumultuous 2018, that has just acquired a VMS company (OnSSI) who itself acquired a VMS company in 2015...
Dahua USA Sales Team Cuts - 'Strategic Right Sizing' on Dec 18, 2018
Dahua USA finishes a tumultuous year in which it acquired the Flir SMB business, was subject to the US government ban, terminated and restructured...
This Brooklyn Storefont Sells Millions In Uniview And Hikvision on Dec 18, 2018
Looking at their Brooklyn headquarters for this "CCTV Manufacturer", it is not much: Inside, it is not better: However, this company is one...

Most Recent Industry Reports

Access Control Cabling Tutorial on Jan 15, 2019
Access Control is only as reliable as its cables. While this aspect lacks the sexiness of other components, it remains a vital part of every...
Gorilla Technology AI Provider, Raises $15 Million, Profiled on Jan 15, 2019
Gorilla Technology is a Taiwanese video analytics manufacturer that recently announced a $15 million investment from SBI Group, saying this...
2019 IP Networking Book Released on Jan 14, 2019
The new IP Networking Book 2019 is a 285 page in-depth guide that teaches you how IT and telecom technologies impact modern security...
Arecont Costar Layoffs on Jan 14, 2019
Arecont Vision, a Costar Company, has laid off more than 10% of their workforce in a move the company described to IPVM as a result of "important...
The False SCMP Story on Hikvision NYC AI on Jan 14, 2019
In the past week, one of Asia's largest publications, the South China Morning Post (SCMP), posted an article about "Chinese [facial recognition]...
WDR Tutorial on Jan 11, 2019
Understanding wide dynamic range (WDR) is critical to capturing high quality images in demanding conditions. However, with no real standards, any...
Pelco Favorability Results 2019 on Jan 11, 2019
Pelco had a significant favorability problem amongst integrators in our previous study (see 2016 Pelco results). Now, in the first edition of our...
Bad: Dahua Villa Video Doorbell Tested on Jan 11, 2019
Doorbells are one of the hottest segments in the residential market but Dahua's Villa Video Doorbell is the worst we have tested.   We bought and...
Last Chance - Winter 2019 IP Networking Course on Jan 10, 2019
Today is the last day to register for the Winter 2019 IP Networking course. This is the only networking course designed specifically for video...

The world's leading video surveillance information source, IPVM provides the best reporting, testing and training for 10,000+ members globally. Dedicated to independent and objective information, we uniquely refuse any and all advertisements, sponsorship and consulting from manufacturers.

About | FAQ | Contact