Teledyne to acquire FLIR in $8B deal

Teledyne Technologies on Monday announced that it has entered into an agreement to acquire FLIR Systems in a cash and stock transaction valued at approximately $8 billion.

Under the terms of the deal, FLIR stockholders will receive $28 per share in cash and 0.0718 shares of Teledyne common stock for each FLIR share, which equates to a total purchase price of $56 per FLIR share. The deal has been approved by the boards of directors for both companies and is expected to close during the middle of 2021 subject to customary regulatory approvals.

In a conference call with investors on Monday, Robert Mehrabian, Executive Chairman of Teledyne, which makes digital imaging products and software, as well as engineered systems, instrumentation, and aerospace and defense electronics, noted that the two companies had combined 2020 pro forma revenues of $5 billion and that nearly 60% of the companies’ combined revenues were generated in the digital imaging space.

“The bottom line is very simple: The technologies that cut across our two businesses, the underlying technologies are identical,” Mehrabian explained. “I think (FLIR) brings a unique capability but in different semiconductor materials than ours and we bring a unique capability across X-rays, very specific niche infrared and moving to microwaves and radio waves.”

Jim Cannon, President and CEO FLIR, said during the call that the company has embarked on a “strategic pivot” over the past two years away from commercial and consumer markets and toward industrial and defense applications. In 2018, for example, FLIR sold Lorex and its SMB security business to Dahua as a part of this shift.

“The progress we’ve made since announcing this change in course has allowed us to build significant momentum across the enterprise, driving growth, innovation and key business wins even in the dynamic macroeconomic conditions of the last several quarters,” he said. “When we look at this transaction from FLIR’s perspective, it makes sense strategically and financially. Our offerings are uniquely complementary with Teledyne’s and we serve different customers with different applications.”

“FLIR’s commitment to innovation spanning multiple sensing technologies has allowed our company to grow into the multi-billion-dollar company it is today,” Earl Lewis, Chairman of FLIR, said in a statement. “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.”

When asked if Teledyne anticipated any divestitures from the FLIR product portfolio or a change in the company’s market strategy, Mehrabian pointed out the success that FLIR has already achieved on its own and reemphasized how the companies play in different verticals.   

“I think they have been very successful in doing what they have been doing and I don’t think you should change things when they are working,” he said. “What is similar though between the two companies, as I mentioned earlier, we both make sensors it is just that they are different sensors. We make cameras, they make cameras. We sell sensors, cameras and systems ourselves and so do they, but in different markets with different semiconductor products.”  

Mehrabian also said he did not foresee any significant regulatory hurdles to overcome for the deal’s approval.

“In terms of the overall picture, because our technologies and markets are very different – and we serve different segments of the market – we don’t anticipate any issues on those approvals,” he added.

Joel Griffin is the Editor-in-Chief of SecurityInfoWatch.com and a veteran security journalist. You can reach him at [email protected].