Sensor giant Teledyne Technologies Incorporated (NYSE:TDY) has inked an $8 billion deal to acquire Oregon-based FLIR Systems, Inc. (NASDAQ: FLIR). With the acquisition, the industrial giant gains access to valuable thermal imaging and night vision technology crucial to strengthening its sensor business. The transaction should close, mid this year.
FLIR Acquisition
Under the cash and stock transaction deal, FLIR stockholders are to receive $28 a share in cash and 0.0718 shares of Teledyne common stock translating to a total purchase price of $56 a share. The transaction represents a 40% premium to FLIR 30-day volume-weighted average price.
Teledyne has already arranged a $4.5 billion 364-day credit commitment to fund the transaction. FLIR acquisition should be accretive to Teledyne earnings excluding transaction costs in the first full calendar year following the acquisition.
At the core of the Teledyne and FLIR merger are proprietary sensor technologies fuelling some of the biggest industries. The two companies also boast of complementary business models revolving around sensor cameras and sensor systems.
FLIR has made a name for itself on the development of thermal imaging and night vision technology commonly used by military personnel as well as industrial customers. Currently, the company has some $60 million worth of contracts with the army for the Black Hornet drone.
FLIR’s technology has also appeared in the consumer market as add-in thermal cameras for mobile devices. The camera’ is especially useful in detecting plumbing leaks as well as a source of drafts. Likewise, FLIR’s products should help Teledyne expand its footprints into new markets.
FLIR CEO Jim Canon has already confirmed the merger will allow them to offer an end-to-end portfolio of sensory technologies in all key domains and applications across a balanced global customer base.
The thermal imaging company also has a contract for the supply of thermal imaging cameras for Zoox’s Self-driving robotaxi currently powering its self-driving robotaxi. Likewise, the acquisition is poised to make Teledyne a key player in the development of self-driving cars given the thermal imaging cameras at stake. FLIR also joins Teledyne with LiDAR or light detection and ranging sensors currently in use atop self-driving cars.