Honeywell Expands with Elster Acquisition

By Sara Brown

Elster, maker of connected utility meters, has been successfully flipped by holding company Melrose Industries in just three years—and the market responded with glee, with Melrose shares jumping more than 10% in trading Tuesday in London.

According to the New York Times, Melrose is a holding company that buys manufacturing companies for turn around. When the company bought Elster in 2012, it promised a return in excess of £2 billion British pounds—and they delivered, selling the company to Honeywell for £3.3 billion or USD $5.1 Billion dollars—more than twice what they paid for the company.

According to Honeywell’s public announcement, the company has completed more than 80 acquisitions, adding $12 billion in revenue in the past ten years. It’s easy to see how Elster’s 6,800 employees, connected metering portfolio and 200 million unit install base is a promising fit for Honeywell. Even more interesting is CEO Dave Cote’s statement that Elster “creates a new platform for acquisition targets.” I, for one, can’t wait to see what’s next.