Teledyne Technologies, manufacturer of electronic sensor technology (TDY) – Get report on Monday agreed to purchase thermal imaging technology and hardware supplier FLIR Systems (FLIR) – Get report in a cash and stock transaction valued at approximately $ 8 billion.
Under the terms of the agreement, FLIR shareholders will receive $ 28 per share in cash and 0.0718 per common share of Teledyne for each share of FLIR, implying a total purchase price of $ 56 per share of FLIR based on the average price weighted volume of Teledyne’s five-day volume as of December 31.
The transaction reflects a 40% premium for FLIR shareholders based on the weighted average price of FLIR’s 30-day volume on December 31, the companies said.
FLIR’s shares rose 20.19% to $ 52.68 in Monday’s trading.
As part of the transaction, Teledyne secured a $ 4.5 billion, 364-day credit commitment to finance the transaction and refinance certain existing debt. Teledyne expects to finance the transaction with permanent financing before closing.
“At the heart of our companies are proprietary sensor technologies. Our business models are also similar: each of us provides sensors, cameras and sensor systems to our customers. However, our technologies and products are exclusively complementary with minimal overlap, having image sensors based on different semiconductor technologies for different wavelengths, ”said Teledyne’s chief executive, Robert Mehrabian, in a statement.
Teledyne said it expects the acquisition to immediately increase earnings, excluding transaction costs and amortization of intangible assets, and add to GAAP earnings in the first full calendar year after the acquisition.
The transaction, which was approved by the boards of directors of both companies, is expected to close in mid-2021, subject to receipt of the necessary regulatory approvals.
Sales of FLIR thermal cameras based in Wilsonville, Oregon have increased in response to corporate concerns about the coronavirus pandemic. Although their thermal cameras cannot detect or diagnose any type of medical condition, they can identify elevated skin temperatures through non-contact temperature monitoring.
Teledyne’s shares fell 3.78% to $ 377.28. The session closed the last trading day of the year with an increase of 0.68%, to $ 391.98.