Honeywell International Inc. on Friday said it agreed to acquire fulfillment-solutions provider Intelligrated for $1.5 billion in cash, boosting its supply-chain and warehouse automation portfolio.

The move comes as retailers have seen their consumers move online and have tried to retool their supply chains for e-commerce.

"E-commerce continues to grow at an unprecedented rate and customer demands for faster delivery times have created a need for warehouse, logistics and fulfillment solutions that can increase productivity and lower costs for our customers," said Alex Ismail, chief executive of Honeywell Automation and Control Solutions.

Intelligrated—which Honeywell is buying from a company backed by global investment firm Permira—designs, makes and installs warehouse-automation solutions and software. The company has customers such as United Parcel Service Inc., Amazon.com Inc. and Nordstrom Inc.

Intelligrated, based in Mason, Ohio, was founded in 2001 and currently employs more than 3,100 people in the U.S., Canada, Mexico, Brazil and China. Honeywell said the transaction, subject to closing conditions such as regulatory approval, is expected to close by the end of the third quarter.

Honeywell said earlier this week that Chief Executive Dave Cote would step down at the end of March, capping a 14-year tenure.

Honeywell stock climbed 1%, to $117.51, in morning trading in New York and is up 14% from a year ago.

Write to Joshua Jamerson at joshua.jamerson@wsj.com

(END) Dow Jones Newswires

July 01, 2016 10:55 ET (14:55 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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