By Greg Roumeliotis

(Reuters) - Japan's Toyota Industries Corp <6201.T> is competing against U.S. diversified industrial conglomerate Honeywell International Inc <HON.N> to acquire U.S. distribution systems and logistics company Intelligrated Inc, people familiar with the matter said.

The strong interest in the company follows German forklift truck maker Kion Group AG's <KGX.DE> agreement last week to buy Intelligrated's larger peer Dematic for $3.25 billion to expand into automated warehouses and supply chains that have ballooned with the growth of e-commerce.

A deal for Intelligrated could come in days and value the privately held company at around $1.5 billion, including debt, the people said this week. There is no certainty, however, that any acquisition agreement will be reached, the people cautioned.

The sources asked not to be identified because the deliberations are confidential. Honeywell declined to comment. Toyota Industries and Intelligrated did not immediately respond to requests for comment.

Intelligrated, based in Mason, Ohio, manufactures, services and installs high-speed automated material handling equipment in customer distribution centers that primarily serve online retailers.

Private equity firm Permira Advisers LLC acquired Intelligrated in 2012 for more than $500 million from Gryphon Investors, another private equity firm. Reuters reported in March that Permira was working with Centerview Partners Holdings LLC and Nomura Co Ltd <9716.T> on an auction for Intelligrated.

Due to increased online sales and demand for faster delivery times, the market for supply chain automation is expected to grow by 10 percent by 2019, Kion said in its presentation on the Dematic deal last week.

(Reporting by Greg Roumeliotis in New York; Editing by Richard Chang)