Teledyne (TDY) To Buy FLIR Systems (FLIR) For About $8 Billion

By Amit Chowdhry ● Updated January 10, 2021
  • Teledyne Technologies Incorporated (NYSE: TDY) announced it is buying FLIR Systems, Inc. (NASDAQ: FLIR) for approximately $8 billion in a cash-and-stock deal. These are the details.

Teledyne Technologies Incorporated (NYSE: TDY) announced it is buying FLIR Systems, Inc. (NASDAQ: FLIR) for approximately $8 billion in a cash-and-stock deal. As part of the agreement, FLIR shareholders are going to receive $28 per share in cash and 0.0718 per share 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 volume-weighted average price as of December 31. This transaction imputes a 40% premium for FLIR shareholders based on FLIR’s 30-day volume-weighted average price as of December 31.

As part of the deal, Teledyne arranged a $4.5 billion 364-day credit commitment for funding the transaction and refinance certain existing debt. And Teledyne expects to fund the transaction with permanent financing before the closing.

Teledyne is expecting the acquisition to be immediately accretive to earnings excluding transaction costs, intangible asset amortization, and accretive to GAAP earnings in the first full calendar year following the acquisition. And the transaction – which has been approved by the boards of both companies – is expected to close in the middle of 2021 subject to the receipt of required regulatory approvals.

KEY QUOTES:

“At the core of both our companies is proprietary sensor technologies. Our business models are also similar: we each provide sensors, cameras and sensor systems to our customers. However, our technologies and products are uniquely complementary with minimal overlap, having imaging sensors based on different semiconductor technologies for different wavelengths. For two decades, Teledyne has demonstrated its ability to compound earnings and cash flow consistently and predictably. Together with FLIR and an optimized capital structure, I am confident we shall continue delivering superior returns to our stockholders.”

— Robert Mehrabian, Executive Chairman of Teledyne

“FLIR’s commitment to innovation spanning multiple sensing technologies has allowed our company to grow into the multi-billion-dollar company it is today. 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.”

— Earl Lewis, Chairman of FLIR

“We could not be more excited to join forces with Teledyne through this value-creating transaction. Together, we will offer a uniquely complementary end-to-end portfolio of sensory technologies for all key domains and applications across a well-balanced, global customer base. We are pleased to be partnering with an organization that shares our focus on continuous innovation and operational excellence, and we look forward to working closely with the Teledyne team as we bring our two companies together to capitalize on the important opportunities ahead.”

— Jim Cannon, President and Chief Executive Officer of FLIR