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Honeywell (HON) Buys Sine Group, Strengthens Product Offerings

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Honeywell International Inc. (HON - Free Report) recently announced that it has completed the acquisition of Sine Group. However, the financial terms of the transaction were kept under wraps.

Notably, Honeywell’s shares declined 1.3% yesterday to eventually close the trading session at $211.85.

Based in Adelaide, Australia, Sine Group is a software as a service (SaaS) company engaged in offering visitor management, supply chain and workplace solutions, which are easily compatible with mobile devices. The company’s SaaS solution boasts user-friendly features and provides its customers with added capabilities that enhances security, safety, and compliance across their operational sites. The company’s solutions are used across several industries like industrial, commercial real estate, education, pharma, logistics and construction, among others.

Benefits of the Deal

Sine Group’s expertise in SaaS-based solutions coupled with its strong innovation capabilities will enable Honeywell to add a cloud-based mobile platform for its enterprise performance management solution offering — Honeywell Forge.

Also, Sine Group’s advanced software will allow Honeywell in offering its Connected Buildings solutions with added security and safety features to its customers. In fact, the acquisition is likely to expand Honeywell’s customer base for its enterprise performance management solutions, along with improving the company’s ability to facilitate organizations in operating more effectively and securely.

Other Inorganic Moves

The latest transaction is in sync with Honeywell’s policy of acquiring businesses for expanding its market share, product offerings and customer base. In October 2020, the company acquired Ballard Unmanned Systems, which will enhance its prospects in the unmanned aerial systems market. Also, its acquisition of Rocky Research in the same month will enhance growth opportunities for its existing offerings in the energy storage, power and thermal management, and power generation arenas.

Zacks Rank, Price Performance and Estimate Revisions

Honeywell, with approximately $148.7 billion market capitalization, currently carries a Zacks Rank #3 (Hold). The company will benefit from strength across its defense and space businesses, strong demand for warehouse automation products and high backlog level. However, headwinds across its commercial original equipment business are likely to affect its performance in the near term.  

In the past three months, the company’s share price has increased 25.2% compared with the industry’s growth of 20.2%.


 

The Zacks Consensus Estimate for Honeywell’s earnings is pegged at $7.03 for 2020, up 2.2% from the 60-day-ago figure. The consensus estimate for 2021 earnings is pegged at $7.84, up 1.8% over the same time frame.

Key Picks

Some better-ranked stocks are Danaher Corporation (DHR - Free Report) , Crane Co. (CR - Free Report) and Applied Industrial Technologies, Inc. (AIT - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Danaher delivered a positive earnings surprise of 17.00%, on average, in the trailing four quarters.

Crane delivered a positive earnings surprise of 14.59%, on average, in the trailing four quarters.

Applied Industrial delivered a positive earnings surprise of 14.68%, on average, in the trailing four quarters.

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