New CEO, billion-dollar acquisition. Does this small company hide an opportunity?
Over the past five years, a company with revenue of around $1.5 billion has recorded five consecutive years of organic revenue growth and record adjusted earnings per share. In the third fiscal quarter of 2026, revenue grew 13.8 percent year over year, with the organic component contributing 8.2 percentage points—a pace that many much larger industrial competitors might envy. The stock has added more than 30 percent over the past twelve months, and the company has increased its dividend for four decades without interruption.
Key points
The $1.4 billion acquisition of Honeywell PSS (8x EBITDA) enlarges Brady by 70% of revenue and pits it against twice-as-large Zebra Technologies.
Net cash of $149 million turns into net debt of $1.3 billion; Net Debt/EBITDA jumps to 2.5x, with a target of below 2x within two years.
New CEO Nargolwala took office in June 2026 and shortly afterward bought $1 million of stock out of his own pocket.
Organic growth accelerated to 8.2% in Q3 FY26, but over the last two years growth has been driven mainly by acquisitions.
Own DCF: fair value $66–175 depending on the scenario, base case $114, i.e., about 19% above the current price of $96.
Yet right now it is undergoing the biggest transformation in more than a hundred years of existence. In early August 2026 it completed a $1.4 billion acquisition—a transaction whose size equals roughly one-third of the company's market capitalization before the deal was announced. The seller is one of the world's largest industrial conglomerates, and the purchased segment generated revenue of about $1.1 billion last year. In a single step, the company is increasing its size by revenue by about 70 percent and, for the first time in its history, entering the mobile computers and scanning technology segment, where it had not operated before.
Financing for the acquisition also comes at a time of leadership change. In June 2026, the long-serving CEO retired after eleven years in the role and was replaced by a manager with previous experience leading a publicly traded company in the sensor industry. The combination of new leadership, significantly higher debt, and integration of a business of comparable size presents investors with a set of questions that a simple look at valuation multiples cannot answer.
About the company
Brady Corporation $BRC is an American company from Milwaukee founded in 1914 that has been manufacturing labels, signage, and safety products for industrial workplaces for over a century. Brady has long operated in two main areas:
identification solutions, i.e., printers, materials, RFID technology, and barcodes,
workplace safety products, such as safety signs, floor marking, lockout/tagout systems for equipment maintenance, and spill containment products.
Main industries where the company finds customers include manufacturing, electrical, aerospace, healthcare, telecommunications, and construction.
After completing the Honeywell PSS acquisition, the company moves to two reporting segments. The original Brady business is now reported as Identification Solutions, while the acquired division is named Intelligent Productivity Solutions. This split is not cosmetic but reflects a fundamental shift in the portfolio away from purely physical marking toward software-driven data collection solutions.
Two companies in one
Before evaluating the acquisition, it is useful to understand exactly what Brady is buying.
Metric | Honeywell PSS |
|---|---|
Main products | mobile computers, barcode scanners, printers, voice navigation systems |
Headquarters | Fort Mill, South Carolina |
Revenue (2025) | ~$1.1 billion |
Employees | ~3,000 (total Brady employees after acquisition ~9,400) |
Target markets | warehouses, logistics, transportation, manufacturing, retail |
Honeywell PSS acquisition: economic logic and price
Why Honeywell is selling and why Brady is buying
In recent years, Honeywell has been gradually slimming its portfolio and concentrating capital on aerospace, building automation, and energy transition. The PSS division generates solid revenue but was not part of this core focus and represented capital placed outside Honeywell's main strategic priorities.
For Brady, the logic is the opposite:
Missing technology layer. The company has long sold printers and consumables for identification but never had its own platform for mobile data collection, barcode scanning, or RFID hardware in the form offered by PSS. By buying, Brady gains not just additional revenue but the missing layer of the technology portfolio that links physical labeling with digital tracking of goods and assets.
Expansion of the addressable market. According to Brady's own announcement of the purchase agreement on April 20, 2026, the acquisition gives access to a productivity and data collection market worth approximately $9 billion that the company previously could not access.
Cross-selling opportunity. Brady has a large network of industrial customers in identification and safety, to whom it can now offer mobile computers and scanners, while PSS customers can be offered Brady's labels and printers.
Brady describes the transaction as creating an "industrial technology platform" covering identification, safety, connectivity, and intelligent workflows.