By Jui Chakravorty Das
CHICAGO (Reuters) - Honeywell International Inc (HON.N: Quote, Profile, Research, Stock Buzz) will likely buy a few companies in 2008, after pulling back from acquisitions last year due to high prices, the diversified manufacturer's chief executive said on Tuesday.
"Prices were getting ridiculous," Dave Cote, chairman and CEO of Honeywell, said at the Reuters Manufacturing Summit. "We extricated ourselves for a year. That's changed. Prices have become much more reasonable."
Interest from private equity firms had pushed takeover prices sky-high, but the credit squeeze has made it harder for the firms to borrow for takeover bids, forcing down prices.
Cote said he expected Honeywell's deals in 2008 to be "under a billion dollars" each.
He said he was not certain about the reason for a drop in prices. "It may be general caution," Cote said. "Maybe there is a recognition now that things were frothy, and people are not going to get those prices anymore."
Cote sees most deal opportunities for Honeywell, the world's largest maker of cockpit electronics, in the aerospace and automated control systems sectors.
"We want to graft companies we buy onto companies already doing well ... so we can justify the deal on cost synergies," Cote said.
Aviation equipment suppliers saw record levels of commercial jet orders in 2007, with leading plane makers Boeing Co (BA.N: Quote, Profile, Research, Stock Buzz) and Airbus (EAD.PA: Quote, Profile, Research, Stock Buzz) booking nearly 2,750 commercial jet orders. Continued...
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