Teledyne to buy sensor maker Flir Systems for US$7.36b

[CALIFORNIA] Teledyne Technologies made its biggest acquisition in three decades, agreeing to buy Flir Systems for about US$7.36 billion to augment its lineup of sensors used in aerospace and defence.

Flir holders will receive about US$56 per share in cash and stock, based on average trading prices over the past five days, according to a statement on Monday. That reflects a 28 per cent premium to the company's last closing price of US$43.83 on Dec 31.

Both manufacturers of sensors, cameras and sensor systems share similar business models, but have little overlap because their technologies involve different wavelengths, Teledyne executive chairman Robert Mehrabian said in the statement.

Thousand Oaks, California-based Teledyne said the deal will immediately add to earnings. It said the total value of the transaction was about US$8 billion.

With demand on the rise, Teledyne has been targeting acquisitions. The company, which has a US$14.5 billion market valuation, said in October that it had a strong balance sheet and a "healthy" pipeline of buyout targets that would help it build cash flow over coming years. It paused the acquisition of France's Photonis in September, citing conditions proposed by the French government.

Flir, based in Wilsonville, Oregon said its investors will receive US$28 a share in cash and 0.0718 Teledyne shares for each Flir share held.

Flir products are used in defence, heavy industry and government. The 42-year-old company is best known for airborne intelligence, reconnaissance and targeting systems on war planes.

It's been evolving toward a range of decision-support activities, ranging from battlefield detection to helping first responders identify missing persons at sea, or monitoring factory equipment. It had just over 4,000 employees, its chief executive, Jim Cannon, said in a December presentation.

Evercore advised Teledyne on the transaction and Goldman Sachs worked with Flir. Teledyne has agreed on a unsecured bridge facility credit with Bank of America as sole lead arranger.

BLOOMBERG