BOSTON/NEW YORK (Reuters) - Diversified U.S. manufacturer Honeywell International Inc (HON.N) said on Wednesday it has reached a deal to buy French personal protection equipment maker Sperian Protection SPEP.PA for $1.1 billion in cash.
Honeywell’s 117 euros-per-share offer for the maker of face masks and other protective equipment tops a prior bid by French holding company Menelas, owned by Cinven Investment Fund, which in March offered 70 euros per share for Sperian.
Sperian’s board unanimously approved the Honeywell offer. The U.S. company has already signed agreements to buy the stakes of Sperian’s two largest shareholders, Essilor ESSI.PA and Ginette Dalloz, which own 15 percent and 13.2 percent of the company’s shares, respectively.
Honeywell, based in Morris Township, New Jersey, will now have to submit its offer to the rest of Sperian’s investors. The company needs 57 percent of Sperian’s shares to be tendered, including the 28.2 percent it agreed to buy, in order to close the deal.
Honeywell has been building its presence in the protective equipment business in recent years, notably through its $1.2 billion 2008 takeover of Norcross Safety Products.
Sperian makes products ranging from protective face and glasses to industrial clothing and shoes. It will be combined with Honeywell’s Automation and Control Solutions’ Life Safety business.
Honeywell said its offer represented a 93 percent premium to Sperian’s share price prior to Cinven’s bid. It expects the deal dilute earnings by 4 cents per share in 2010 and be accretive in 2011.
A Honeywell spokesman said the total $1.4 billion deal value included the assumption of about $300 million in debt.
The deal requires clearance by EU, U.S. and French regulators. Honeywell expects the deal to close in the third quarter.
Deutsche Bank and Lazard advised Honeywell on the deal.
Honeywell’s shares fell 2 percent, or 90 cents, to $43.82 on the New York Stock Exchange at mid-afternoon.
Reporting by Scott Malone and Michael Erman, Editing by Gerald E. McCormick, Maureen Bavdek and Richard Chang