Teledyne scores biggest deal ever with Flir buyout
Teledyne Technologies agreed to buy Flir Systems for $7.36 billion, making its biggest acquisition ever to bolster a lineup of sensors and imaging systems used in aerospace and defense.
Flir’s shares, which tumbled last year, jumped on Monday by the most since 2001.
The companies would have combined 2020 revenue of roughly $5 billion on a pro forma basis, according to a presentation for analysts. Flir’s imaging products in the battlefield and commercial markets would add to Teledyne’s lineup of space and aircraft systems.
With demand on the rise, Teledyne, based in Thousand Oaks, has
been targeting acquisitions. The company, which was valued at $14.5 billion as of Dec. 31, said in October that it had a strong balance sheet and a “healthy” pipeline of buyout targets that would help it increase cash flow over coming years. It paused the acquisition of France’s Photonis in September, citing conditions
proposed by the French government.
The deal calls for Flir investors to receive $28 a share in cash and 0.0718 Teledyne share for each Flir share held. That values the deal at about $56 a share, based on average trading prices over the past five days, according to a statement. The purchase price is a 28% premium to Flir’s last closing price of $43.83, on Dec. 31.
While the manufacturers of sensors, cameras and
sensor systems have similar business models, there’s little overlap because their technologies involve different wavelengths, Teledyne Executive Chairman Robert Mehrabian said in the statement.
Still, Truist analyst Michael Ciarmoli said he expected the deal could come under regulatory scrutiny because of the new company’s presence in the markets for infrared and digital imaging.
Flir surged 19% to $52.06 at 12:56 p.m. in New York after climbing as much as 24%, the most intraday since September 2001. Teledyne fell 8.6% to $358.38 Monday, the most intraday since March. Flir dropped 16% last year, while Teledyne rose 13%.
Teledyne said the Flir deal, which it valued at about $8 billion, would add to earnings immediately when excluding transaction costs and the amortization of intangible assets.