Honeywell’s $1.5 Billion Bet on an E-Commerce Boom Pays Off
The purchase of warehouse automation specialist Intelligrated looks especially smart now that Amazon is going to one-day delivery.
Amazon.com Inc. raised the bar for its retail rivals yet again with its April announcement that it would roll out free one-day shipping for top customers. Stepping up the pace from the previous two-day shipping window will be costly: Amazon will spend $800 million in the current quarter alone to modify its logistics network, forcing competitors to make sizable investments to keep up. One likely beneficiary of the apparently insatiable demand for ever-faster shipping is Honeywell International Inc. and its Intelligrated warehouse automation business.
Honeywell’s $1.5 billion acquisition of Intelligrated in 2016 is one of the rare large, technology-focused deals that’s been a smashing success. Intelligrated’s products—which include voice-directed systems that accurately guide employees to goods within massive warehouses—help companies reduce costs and shorten the time between orders coming in and packages going out.