Teledyne Technologies entered an agreement to acquire FLIR Systems, the parent company of Raymarine, for around $8 billion in cash and stock, the companies announced in a joint statement this morning.
Under the agreement, FLIR stockholders will receive $28 per share in cash and 0.0718 shares of Teledyne common stock for each FLIR share. This implies a total purchase price of $56 per FLIR share based on Teledyne’s five-day weighted average price as of Dec. 31.
The transaction reflects a 40 percent premium for FLIR stockholders based on FLIR’s 30-day volume weighted average price at the last closing.
“At the core of both our companies is proprietary sensor technologies,” Teledyne executive chairman Robert Mehrabian said in a statement.
Mehrabian said the companies also share similar business models in that they provide sensors, cameras and sensor systems. “However, our technologies and products are uniquely complementary, with minimal overlap, having imaging sensors based on different semiconductor technologies for different wavelengths,” he said. “For two decades, Teledyne has demonstrated its ability to compound earnings and cash flow consistently and predictably.”
Teledyne has arranged a $4.5 billion, 364-day credit commitment to fund the transaction and refinance certain existing debt, but it expects to fund the transaction with permanent financing prior to closing.
The company expects the acquisition to be immediately accretive to earnings, excluding transaction costs and intangible asset amortization, and accretive to GAAP earnings in the first full calendar year following the acquisition.
“FLIR’s commitment to innovation spanning multiple sensing technologies has allowed our company to grow into the multi-billion-dollar company it is today,” FLIR chairman Earl Lewis said. “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.”
The sale is expected to close midyear.