Honeywell International Inc. (HON), whose product lineup includes protective industrial footwear, agreed to buy Singapore shoemaker King’s Safetywear Ltd. for $338 million.
Buying the shoemaker adds “more opportunities for Honeywell in the higher-growth Southeast Asia, Australia and Europe regions,” Mark Levy, head of the life safety unit, said in a statement. The transaction should close in early 2012 and boost earnings next year, Morris Township, New Jersey-based Honeywell said in the statement.
“Think of this as an incremental addition” to Honeywell’s automation and controls segment, which includes the life safety business, Brian Langenberg, an analyst with Langenberg & Co. in Chicago said in a telephone interview. “They’ve been accruing actively the last couple of years.”
The transaction was the second-largest of five disclosed agreements by Honeywell this year. The company said it’s paying 11.5 times King’s estimated 2011 earnings before interest, taxes, depreciation and amortization.
A median multiple of 6.9 times ebitda was paid in 15 purchases of footwear companies worldwide in the past five years, according to data compiled by Bloomberg.
Navis Capital Deal
King’s Safetywear is majority owned by Navis Capital Partners, a Malaysian buyout firm that took the company private in December 2008 for about S$100 million ($78 million), according to the fund’s website. King’s Safetywear raised S$17.4 million in a 2003 initial public offering that valued the company at S$68.1 million.
Sales at King’s Safetywear this year will be about $138 million, Honeywell said.
King’s Safetywear makes leather-based and polyurethane soled safety footwear used in the manufacturing, oil and gas, mining and construction industries. It markets its products under the King’s, Otter and Oliver brands, according to its website. The firm, led by Chief Executive Officer Alex Teo, was established in 1965 and has manufacturing facilities in Indonesia, Portugal and Australia.
Honeywell fell 2.3 percent to $51.20 in New York amid a decline in the broader Standard & Poor’s 500 Index.