- Industrial conglomerate Honeywell has agreed to buy Intelligrated, a provider of warehouse fulfillment solutions, from private equity group Permira Funds for $1.5 billion.
- Intelligrated's customers include Amazon, United Parcel Service and Nordstrom, and the deal follows other fulfillment-related acquisitions in recent years by Amazon and others, including forklift trucks supplier Kion Group AG's $2.1 billion agreement to purchase automated systems developer Dematic Corp., announced last month.
- Permir paid about $500 million in 2012 to aquire Mason, Ohio-based Intelligrated, which has more than 3,000 employees in the U.S. and four other countries.
E-commerce is a very big deal, and so is fulfillment of e-commerce purchases. Just ask Amazon, a giant e-commerce retailer that also has been extremely aggressive investing in innovations on the fulfillment side of its business.
For example, Amazon acquired Kiva Systems, a developer of robots for warehouse fulfillment functions, back in 2012, before a lot of companies were thinking about robots for fulfillment, and before a lot of companies understood that fulfillment—and not just price—could be Amazon's competitive edge.
So, now, everyone is looking for ways to modernize, streamline and cut costs from the fulfillment process, and that is tending to make hot properties of the companies behind the most interesting innovations in fulfillment. Intelligrated appears to have been a chip in this game for a while, as it had been owned by another private equity firm before Permira, and both investment firms no doubt were looking for just the right moment to cash in. And the timing may not be much of a surprise, considering that Intelligrated peer Dematic was sold in recent days to Germany's Kion Group.
What are Honeywell's plans in this space? We'll have to wait and see, but the conglomerate reportedly beat out Toyota Industries for the right to buy Intelligrated, so it must understand that warehouse automation has never been more important to the retail and e-commerce ecosystem.