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Honeywell buys Elster in €5bn deal

Honeywell has signed a definitive agreement to acquire the Elster Division of Melrose Industries, a gas heating, controls, flowmetering, and advanced technologies provider, for approximately $5.1 billion (€4.5 billion). 

The price translates to approximately 12.6 times Elster's estimated 2015 consensus earnings before interest, taxes, depreciation, and amortization (EBITDA), and the acquisition is anticipated to occur in the first quarter of 2016.

The agreement is subject to customary closing conditions, including regulatory review and Melrose shareowner vote. 

Elster employs approximately 6,800 people with major locations in the US, Germany, the UK, and Slovakia and maintains an installed base with more than 200 million metering modules deployed over the course of the last 10 years.

Honeywell chairman and CEO Dave Cote says Elster’s gas, water, and electric meters are valued for their reliability, safety, and accuracy, all features which contributed to Honeywell’s decision to undertake the acquisition.