Teledyne Technologies, manufacturer of electronic sensor technology (TDY) – Get report agreed on Monday to buy FLIR Systems’ thermal imaging technology and hardware provider (FLIR) – Get report in a cash-and-stock deal worth about $ 8 billion.
Under the agreement, FLIR shareholders will receive $ 28 per share in cash and 0.0718 a share of Teledyne common stock for each FLIR share, implying a total purchase price of $ 56 per FLIR share, based on Teledyne’s five days long volume weighted average price from 31 December.
The transaction reflects a 40% premium to FLIR shareholders, based on FLIR’s 30-day volume-weighted average price on December 31st.
Shares of FLIR rose 20.19% on Monday to $ 52.68.
As part of the transaction, Teledyne arranged a $ 4.5 billion, 364-day credit facility to finance the transaction and refinance certain existing debt. Teledyne expects to finance the deal with permanent financing before closing.
‘The core of both our companies is our own sensor technologies. Our business models are also similar: we each offer sensors, cameras and sensor systems to our customers. However, our technologies and products are uniquely complementary with minimal overlap, with image sensors based on different semiconductor technologies for different wavelengths, ‘said Teledyne CEO Robert Mehrabian in a statement.
Teledyne said it expects the acquisition to be immediately profitable, with the exception of transaction costs and amortization of intangible assets, and that, according to GAAP earnings, it will continue in the first full calendar year after the acquisition.
The transaction, which was approved by the boards of both companies, is expected to close in mid-2021, subject to the receipt of the necessary regulatory approvals.
Sales of FLIR thermal cameras in Wilsonville, Oregon have risen in response to corporate concerns about the coronavirus pandemic. Although the thermal cameras cannot detect or diagnose any form of medical conditions, they can identify elevated skin temperatures through non-contact temperature monitoring.
Teledyne shares decreased 3.78% to $ 377.28. The last trading day of the year rose 0.68% to $ 391.98.