Honeywell Bags RMG - Analyst Blog

Honeywell International Inc. (HON) announced completion of its acquisition of RMG Group and its subsidiaries (RMG Regel and Messtechnik GmbH) at an expense of approximately $400 million. RMG has been integrated into Honeywell Process Solutions, which is part of Honeywell’s Automation and Control Solutions business group.

Founded in 1931 in Kassel, Germany, RMG specializes in the design and manufacture of natural gas control, measurement and analysis equipment including flow metering technology, regulating products and safety devices for oil and gas companies. RMG’s estimated sales for 2009 are approximately $290 million.

The acquisition will build Honeywell’s presence particularly in the areas of natural gas transportation, storage, distribution and industrial consumption. RMG aligns strongly with Honeywell’s field instrumentation and control solutions. For example, RMG’s gas flow meters and regulating devices complement Honeywell’s pressure and temperature transmitters, as well as liquid natural gas level gauges. Also, the acquisition of RMG supports Honeywell’s strategy to offer solutions that enhance energy efficiency; nearly 50% of Honeywell’s current technology delivers energy savings and efficiency. Natural gas is a clean fuel alternative that is becoming increasingly popular in both mature and emerging markets around the world.

Honeywell is a diversified technology and manufacturing company, serving customers worldwide with aerospace products and services, control, sensing and security technologies for buildings, homes and industry, turbochargers, automotive products, specialty chemicals, electronic and advanced materials, process technology for refining and petrochemicals and energy efficient products and solutions for homes, business and transportation. Its nearest competitors are Johnson Controls Inc. (JCI), Goodrich Corp. (GR) and United Technologies (UTX).

We currently have a Neutral recommendation on Honeywell.