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Honeywell Makes a $1.3B Bet on Life Sciences and Artificial Intelligence

Honeywell is making another software acquisition.

David Williams/Bloomberg

Honeywell International is making a software acquisition, continuing its transformation into a software-industrial enterprise.

Honeywell (ticker: HON) is buying New Jersey-based Sparta Systems for $1.3 billion in cash. Sparta makes quality management software solutions, enhanced with artificial intelligence, for the life science industries. The deal opens up new a new life-science end market for Honeywell.

Sparta has about 250 employees and serves more than 400 customers, including 42 of the world’s top 50 pharmaceutical companies and 33 of the top 50 medical device companies.

“Our combined offerings will make it easier for customers to gain critical insights from manufacturing and quality data that can improve their manufacturing processes while ensuring product quality, patient safety, and supply chain continuity,” said Que Dallara, president and chief executive officer of Honeywell Connected Enterprise in the company’s news release.

Honeywell Connected Enterprise manages Forge—Honeywell’s operational technology software platform that aggregates, analyzes, and optimizes data coming off industrial assets such as planes, as well as manufacturing plants and processes—and other software applications. HCE is responsible for rolling out solutions used in all of Honeywell’s business units.

Honeywell also sees broader applications for Sparta solutions across the industrial giant’s portfolio of businesses. “While Sparta’s capabilities will initially help us expand our capabilities for our existing breakthrough initiative in life sciences, we plan to leverage Honeywell’s global footprint and expertise to quickly expand Sparta’s capabilities to serve other markets,” Rajeev Gautam, president and chief executive officer of Honeywell Performance Materials and Technologies, said in the release.

Sparta is the second software acquisition in only a few days. Honeywell also bought Sine last week. Sine products will help Honeywell Forge create mobile applications so users can access operations data from any device.

It has been an very busy year for Honeywell. In additional to the two most recent software acquisitions, the company has entered into several partnerships with Signify (LIGHT.Amsterdam), Microsoft (MSFT), SAP (SAP.Germany), and Vertiv (VRTV). The seemingly disparate group of partners has a common theme—Honeywell is merging the operational data it gets from all of its process control technology with other data and software applications to enhance value for customers.

CEO Darius Adamczyk took over for David Cote in 2017 and has made improving and expanding Honeywell software offerings a priority.

Barron’s recently wrote positively about Honeywell, believing its investment in software would enhance the value of its existing industrial businesses. Since that article appeared in November 2019, Honeywell stock has returned about 20%, including dividends. That lags behind the return of S&P 500 by about 2 percentage points. But it’s better than the return of the Dow Jones Industrial Average by about 8 percentage points.

Write to Al Root at [email protected]

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