Sensor manufacturer Teledyne Technologies will acquire camera and bridge systems provider FLIR Systems in a cash and stock transaction valued at around US$8Bn
Both companies announced on 4 January 2021 they have entered into a definitive agreement to combine their businesses and technologies.
This acquisition agreement comes as demand for sensors and cameras is rapidly rising in maritime as more companies adopt remote monitoring and camera-based visualisation technologies.
At US$8Bn, the size of this acquisition is indicative of the huge scale of the overall sensor market and the upcoming growth opportunities.
Under the terms of this agreement, FLIR stockholders will receive US$28 per share in cash and 0.0718 shares of Teledyne common stock for each FLIR share. This implies a total purchase price of US$56 per FLIR share, based on Teledyne’s five-day volume weighted average price as of 31 December 2020.
To finance this acquisition, Teledyne has arranged a US$4.5Bn, 364-day credit commitment. This will fund the transaction and refinance certain existing debt.
Both US-listed companies provide maritime and offshore sectors with sensor, camera and telemetric data solutions.
“At the core of both our companies is proprietary sensor technologies,” said Teledyne executive chairman Robert Mehrabian. “Our business models are also similar: we each provide sensors, cameras and sensor systems to our customers.”
Teledyne supplies multibeam echo sounders for hydrographic and bathymetric mapping and geospatial data. It manufactures technology for harsh underwater environments, including instrumentation, imaging, interconnect solutions, seismic sensing and unmanned vehicles.
“However, our technologies and products are uniquely complementary with minimal overlap, having imaging sensors based on different semiconductor technologies for different wavelengths,” said Mr Mehrabian.
“For two decades, Teledyne has demonstrated its ability to compound earnings and cash flow consistently and predictably. Together with FLIR and an optimised capital structure, I am confident we shall continue delivering superior returns to our stockholders.”
FLIR chairman Earl Lewis said the board fully supported Teledyne’s advances and this transaction as it continues “FLIR’s commitment to innovation spanning multiple sensing technologies.”
FLIR president and chief executive Jim Cannon expects the combined companies will “offer a uniquely complementary end-to-end portfolio of sensory technologies for all key domains and applications”.
This transaction should enable both companies to “together capitalise on the important opportunities ahead,” said Mr Cannon.
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