Honeywell to Acquire US Digital Designs, Inc., Expanding Public Safety Communications Capabilities

Honeywell (Nasdaq: HON) today announced it has agreed to acquire privately held US Digital Designs, Inc., a Tempe, Ariz.-based company, for a purchase multiple of ~14X EBITDA in an all-cash transaction. The company delivers alerting and dispatch communications solutions, which enhance first responders’ efficacy and enable faster emergency response times.

US Digital Designs’ EBITDA margins are accretive to Honeywell, and Honeywell is expected to achieve a return on investment of greater than 25% by the fifth year that US Digital Designs is part of Honeywell.

The acquisition will be integrated into Honeywell’s Fire and Connected Life Safety systems business and will expand Honeywell’s line of solutions for public safety communications, providing first responders with better situational awareness of building emergencies and improved life safety. When combined with Honeywell’s solutions, US Digital Designs’ offerings will securely transmit detailed data about the emergency, such as the type of hazard, severity, and location within the impacted building, all before first responders even arrive onsite.

The existing communications infrastructure between fire stations and emergency centers often uses legacy, manual technology, which slows response times and affects the accuracy of transmitted information. In contrast, solutions from US Digital Designs instantaneously connect dispatch centers to fire stations, improving both the quality of the information shared and the time it takes for first responders to arrive at an emergency. It is estimated that in the coming years, aligned to pending federal legislation to improve the 911 system, several billions will be invested in the United States alone to upgrade legacy alarm infrastructure to provide faster, more precise alarm alerting to first responders.

“The future of public safety relies on technology. We are integrating intelligence throughout the fire alarm transmission process – from the fire panel to the first responders – and providing uninterrupted communications to first responders,” said Doug Wright, president and chief executive officer, Honeywell Building Technologies. “Integrating US Digital Designs’ fire station alerting capabilities with Honeywell’s Connected Life Safety Services will allow us to eliminate manual processes and significantly reduce response time. Helping first responders arrive faster on site means potentially saving more lives and providing a higher level of asset protection.”

US Digital Designs’ suite of hardware and software solutions, which includes dispatch communication aids and mobile alerting applications, provides situational awareness and helps reduce response times. US Digital Designs also offers solutions that awaken first responders with soft-start LED lighting and audio alerts that are less disruptive.

The offerings complement Honeywell’s suite of solutions that help its customers meet their environmental, social and governance (ESG) goals, including improving safety for first responders.

“We are pleased to join the Honeywell team and support its efforts to add more automation and digitization to the public safety communications process. Reducing response times means we can protect more people, buildings and their assets,” said Todd Smith, president and chief electrical engineer, US Digital Designs.

“Honeywell’s scale, global reach and commercial relationships will enable even more fire stations to access our solutions, helping to create safer communities,” said Dominic Magnoni, vice president, chief mechanical engineer and chief operating officer, US Digital Designs.

With this acquisition, Honeywell will further expand its public safety offerings designed to improve the safety of first responders and building occupants. These offerings include Fiplex bi-directional amplifiers (BDAs) that provide continuous and critical in-building radio coverage. Honeywell acquired a majority stake in Fiplex Communications, Inc., in March 2021.

This is the fourth acquisition announced by Honeywell in 2021, part of the company’s disciplined strategy to deploy capital to high-return acquisitions, which will drive future growth.

There is no change to Honeywell’s financial guidance as a result of the acquisition. The acquisition is expected to close in the first quarter of 2022 and is subject to certain regulatory approvals and other customary closing conditions.

About US Digital Designs

Founded in 2000, US Digital Designs Inc. (USDD) provides mission-critical products and services that enable dispatch centers and fire stations to reduce dispatch call processing times and respond to local emergencies effectively. The company offers a suite of hardware and software solutions including dispatching communication systems, illuminated speakers, messaging signs, and mobile monitoring and alerting tools to more than 2,000 fire stations.

About Honeywell Building Technologies

Honeywell Building Technologies (HBT) is transforming the way every building operates to help improve the quality of life. We are a leading building controls company with operations in more than 75 countries supported by a global channel partner network. Commercial building owners and operators use our hardware, software and analytics to help create safe, efficient and productive facilities. Our solutions and services are used in more than 10 million buildings worldwide.

Honeywell (www.honeywell.com) is a Fortune 100 technology company that delivers industry specific solutions that include aerospace products and services; control technologies for buildings and industry; and performance materials globally. Our technologies help aircraft, buildings, manufacturing plants, supply chains, and workers become more connected to make our world smarter, safer, and more sustainable. For more news and information on Honeywell, please visit www.honeywell.com/newsroom.

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