Teledyne buys FLIR in $8bn deal
Teledyne Technologies is to buy thermal sensor and camera maker FLIR in an $8bn deal.
The deal, half in cash and half in shares, has the support of both companies and is expected to be completed in the middle of the year.
“At the core of both our companies is proprietary sensor technologies. Our business models are also similar: we each provide sensors, cameras and sensor systems to our customers. However, our technologies and products are uniquely complementary with minimal overlap, having imaging sensors based on different semiconductor technologies for different wavelengths,” said Robert Mehrabian, Executive Chairman of Teledyne. “For two decades, Teledyne has demonstrated its ability to compound earnings and cash flow consistently and predictably. Together with FLIR and an optimized capital structure, I am confident we shall continue delivering superior returns to our stockholders.”
FLIR, perhaps surprisingly, is over 40 years old, having started in 1978. However it started expanding into full camera systems and more recently into defence systems. In 2016 bought military drone maker Prox Dynamics to create the Unmanned Aerial Systems business line. This was followed in January 2019 with the acquisition of drone maker Aeryon Labs, and last month, it also bought defence drone maker Altavian. In February 2019, FLIR also bought Endeavor Robotics, the US-based defence spin off from iRobot. The company has also acquired camera makers such as Point Grey.
These are a very different product lines for Teledyne, although it fits well with the company’s defence and space component business. However this may be a suitable area to spin-out a systems business.
“FLIR’s commitment to innovation spanning multiple sensing technologies has allowed our company to grow into the multi-billion-dollar company it is today,” said Earl Lewis, Chairman of FLIR.
Next: FLIR integration into Teledyne
“With our new partner’s platform of complementary technologies, we will be able to continue this trajectory, providing our employees, customers and stockholders even more exciting momentum for growth. Our Board fully supports this transaction, which delivers immediate value and the opportunity to participate in the upside potential of the combined company.”
Teledyne, which includes the e2v sensor division in the UK and France, saw sales of $800m in Q4 of 2020, bringing a total revenue of $3.1bn, less than half the value of the deal but a fraction of the current $13.4bn stock market valuation.
The Q4 figures were part of a bounce back after the initial Covd-19 pandemic. “During the third quarter, our shortest-cycle environmental and test and measurement instrumentation businesses experienced a rebound from the trough in the second quarter. With non-COVID healthcare procedures now increasing, we expect a similar recovery for our medical imaging businesses late in the fourth quarter,” said Mehrabian.
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