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 security ********.

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

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

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

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

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

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

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

Financial ********

******** ******** *** ******** *** * ******** ***** ****** *** ******* Honeywell ********, ************ **% ** **** ** ~$** ******* ****** sales. *** ******* ******** ** ********* ($**.**), *** ******* $** ******* USD *** *** *********** ********* *** ************ *******. ******** ***** in *** ***** ******* ** ********** / *******.

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

 

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

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

  • ****** ****** *** ********, ***** ** **** **** ******** ****** know ********* *** ******* **** ** ********, ****** **** ** ***, and ********* **** ** ** *** ********* **** ****-******** **** OEM ********.
  • ******** ********* *** ************ ***** ******** ********* *** ********* / integrator ******** *********** ******** *********. **** **** ** **** ******* "************" **** *** ******** ***** to ***-***** ***** *******, *** ** *** **********, ******** *** air-handling ******* **** ********** ********* ********** * ***** ********.

 

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

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

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

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

********* ******* *** ****** ******** ******** ** $* ******* ******, ****** ** ********** *** *** ******** ** **** ****** ********** coming **** ***.  ***** *** *** **** ******* ** ** safe *** *** **** * **** ** *******, ** *** BSD **** **** *** ** *******, *** ********* ** *** Automation *** ******* ********* ******** **** *********** ****** ** *********'* smallest *** *********** ***** *********** *******.  **'* ******* ***** *** if *** ******** **** ** *** *** **** ** **** Honeywell ********** ** *** *** ** ** *************** ******** *******, or * **** ** ***** *** ***** ** **** **** competencies *******.  ***** **** *** ******** ** *** *** ******** appears ** ** ********* ** (* ***********, *** ******** **** don't ******* * *** ** ********* *&*), ** ***** ** easy ** ******** ******* **** **** ** *** ****** ** well, ********** ** **** **** ** ***** ***** ** ******* their ***** *********.

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

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

********* ** *** * ***** ******* ********** **** ******** ** the ******** ** *** ****** *******.  ***** ******** *********** ******** appears ** ** * ****** ********** ***** ** ***** ******* business, *** ***** *********-******* ******** ******** *** ****** * ********** ** other ********* *******.  *** ** ********* ******** ** ** ****, but ** ***** *** ** **** ** ******** * ******* like ********* ****** * *** *** *** ** * ***** of ************ * **** **** ** *** **. 

Comments (17)

Thumbnail scottpic

Scott Gerrels

IPVMU Certified | 02/25/16 06:39pm

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

Thumbnail brk1

Brian Karas

IPVM | In reply to Scott Gerrels | 02/25/16 07:51pm

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

Undisclosed Manufacturer #1

02/26/16 02:26am

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.

Undisclosed #2

02/26/16 05:51am

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?

Thumbnail brk1

Brian Karas

IPVM | In reply to Undisclosed #2 | 02/26/16 11:11am

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.

Thumbnail last saturday

Mark Jones

02/26/16 01:05pm

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.

Thumbnail brk1

Brian Karas

IPVM | In reply to Mark Jones | 02/26/16 01:19pm

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.

John Honovich

IPVM | In reply to Mark Jones | 02/26/16 01:24pm

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

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

Thumbnail last saturday

Mark Jones

In reply to John Honovich | 02/26/16 01:54pm

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

John Honovich

IPVM | In reply to Mark Jones | 02/26/16 02:00pm

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.

Undisclosed Manufacturer #3

02/26/16 01:31pm

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?

Undisclosed Integrator #4

02/26/16 07:39pm

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

Thumbnail scottpic

Scott Gerrels

IPVMU Certified | In reply to Undisclosed Integrator #4 | 02/27/16 01:26am

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

Chris Hammond

02/26/16 11:11pm

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?

Thumbnail eyeball only

Ryan Anderson

03/01/16 06:36pm

Honeywell just acquired RSI Video (Videofied) this morning.

John Honovich

IPVM | In reply to Ryan Anderson | 03/01/16 06:38pm

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

Undisclosed Integrator #5

05/02/16 04:47pm

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

Security Sales Course Summer 2018 on Jul 13, 2018
Based on member's interest, IPVM is offering a security sales course this summer. Register Now - IPVM Security Sales Course Summer 2018 This...
Eastern and SavvyTech Merge, Form ENS, Targets ADI on Jul 09, 2018
ADI, ENS is coming for you. Or, at least, they hope. Two US distributors, NY based EasternCCTV and California based SavvyTech have merged, to...
Arlo IPO Filing Reveals Key Financial and Competitive Details on Jul 09, 2018
Arlo is going to IPO at a projected valuation greater than Axis. Now, Arlo has released their 175-page Form S1 Registration Statement for its...
Drops Dahua, Fenner Becomes ISS CMO on Jul 09, 2018
Hired to improve Dahua's miserable marketing just last year, Janet Fenner has quit Dahua, joining VMS manufacturer ISS as Chief Marketing...
Pelco Is For Sale on Jun 27, 2018
Pelco is for sale, being shopped by an investment bank, IPVM has confirmed from multiple sources. The company, acquired by Schneider Electric in...
Snap Surveillance Profile on Jun 26, 2018
There are not a lot of video surveillance companies that survive 9 years with only one feature that makes their product stand out. In the case of...
Buy Arecont: Top Bid $10 Million Cash on May 22, 2018
Last year, Arecont had a deal for a purchase price of $170 million (see Failed Arecont China Acquisition). This year, Arecont has a deal for a...
Stealth / UCIT - Remote Video Monitoring Provider Profile on May 18, 2018
Can 2 remote video monitoring companies, Stealth Monitoring from the US and UCIT from Canada combine to impact the market and compete in a changing...
Worst Manufacturer Technical Support 2018 on May 16, 2018
5 manufacturers stood out as providing the worst technical support to 190+ integrators in new IPVM results. These integrators answered: In the...
March Networks Targets Cannabis Market on May 10, 2018
Will the next March Networks customer appreciation event be held a steakhouse or at a Taco Bell at 2 am? Can March sell the types of systems to the...

Most Recent Industry Reports

Security Sales Course Summer 2018 on Jul 13, 2018
Based on member's interest, IPVM is offering a security sales course this summer. Register Now - IPVM Security Sales Course Summer 2018 This...
US Tariffs Hit China Video Surveillance on Jul 13, 2018
Chinese video surveillance products avoided tariffs for the first two rounds. Now, in the third round, many video surveillance products will be...
Last Chance - July 2018 IP Networking Course on Jul 12, 2018
Registration ends today, Thursday. Register now. This is the only networking course designed specifically for video surveillance...
4 Most Difficult Camera Installs (Statistics) on Jul 12, 2018
Heavy housings, cumbersome brackets, heavy ladders required, and tricky field of view requirements will cause difficulties no matter the camera...
Axis Perimeter Defender Video Analytics Tested on Jul 12, 2018
Axis 'high security' video analytics offering is Perimeter Defender, OEMed / developed with Digital Barriers. But how good is Perimeter Defender?...
Hikvision Fights Ban - Claims 'Red Scare', Hires 14 Term Ex-Congressman on Jul 11, 2018
Hikvision is fighting back against the House Bill Ban of their products. Hikvision has hired one of the biggest lobbying firms, led by a 14 term...
Arecont Acquisition By Costar on Jul 11, 2018
Arecont Vision acquisition by Costar Technologies has been approved by the court, concluding the bankruptcy process triggered by Arecont's...
Amazon Ring Partners With Rapid Response For $10 Monitoring on Jul 10, 2018
Amazon's Ring alarm system is using Rapid Response for monitoring, IPVM has confirmed in our testing. Amazon is arguably the most feared new...
SIA Lobbyists Working On House Bill Ban of Dahua and Hikvision on Jul 10, 2018
While SIA is most known for ISC West, SIA maintains the industry's most significant lobbying organization to influence US government action. Last...
Eastern and SavvyTech Merge, Form ENS, Targets ADI on Jul 09, 2018
ADI, ENS is coming for you. Or, at least, they hope. Two US distributors, NY based EasternCCTV and California based SavvyTech have merged, to...

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