Elster products and technologies are expected to strengthen Honeywell Process Solutions’ position in the natural gas sector following an acquisition completed in December 2015.
Honeywell executives said its expanded product lines include ultrasonic and turbine meters, electronic volume correctors, gas chromatographs, flow computers, and regulators and pressure reducing stations for the gas transmission and distribution industry.
While collapsing oil and gas prices have caused turmoil in the upstream oil and gas industry, the move toward greater use of natural gas in industrial applications continues, said Jason Urso, a Honeywell vice president and general manager.
"In the North American market we see extreme enthusiasm for natural gas as a feedstock in making chemicals. We see resurgence in investment in chemic plants, in LNG export plants and efforts to reduce reliance on coal. The plummeting price of oil and gas is impacting capital expenditures in the extreme upstream sector but not in the midstream or downstream. In fact, low cost natural gas for utilities is bringing manufacturing back to the United States, with expansion in the chemical industry and high profitability," said Urso.
The $5.1 billion Honeywell-Elster transaction announced in July 2015 closed earlier than expected following approval by Melrose shareholders and required regulatory approvals, including those in the U.S., European Union and China. It is expected to add about $1.8 billion in sales to Honeywell’s annual revenues.
Elster’s gas heating and gas, water and electricity metering businesses will be integrated with Honeywell’s Environmental & Energy Solutions business (E&ES), part of Honeywell Automation and Control Solutions. Elster’s upstream and midstream gas applications businesses will be integrated with Honeywell Process Solutions, within Honeywell Performance Materials and Technologies.
Elster is involved in three verticals, including water and electricity metering, said Urso.
"But by far their biggest vertical is natural gas metering and infrastructure. The industrial portion of the portfolio includes rotary, turbine and ultrasonic meters and equipment for generation and transmission of natural gas. We now offer a full range of industrial metering devices," said Urso.
There were no changes to the company’s 2015 or 2016 financial guidance provided on Dec. 16, 2015, as a result of the closing announcement.