Manufacturer of electronic sensor technology Teledyne Technologies (TDY) – Get the report Monday agreed to buy thermal imaging technology and hardware supplier FLIR Systems (FLIR) – Get the report in a cash and stock transaction valued at about $ 8 billion.
Under the terms of the agreement, FLIR shareholders will receive $ 28 a share in cash and $ 0.0718 a share of the Teledyne common share for each FLIR share, which implies a total purchase price of $ 56 per FLIR share based on the weighted average price days of the Teledyne volume starting with December 31st.
The transaction reflects a 40% premium for FLIR shareholders based on FLIR’s 30-day weighted average price on Dec. 31, the companies said.
FLIR shares rose 20.19% to $ 52.68 in trading on Monday.
As part of the transaction, Teledyne entered into a $ 4.5 billion, 364-day loan commitment to finance the transaction and refinance certain existing debt. Teledyne expects to finance the transaction with permanent financing before closing.
“Both of our companies are based on proprietary sensor technologies. Our business models are also similar: we each offer our customers sensors, cameras and sensor systems. However, our technologies and products are completely complementary, with minimal overlaps, 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, excluding transaction costs and depreciation of intangible assets and the accumulation of GAAP 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 be completed in mid-2021, subject to receiving the necessary regulatory approvals.
Sales of FLIR thermal chambers in Wilsonville, Oregon, have risen in response to companies’ concerns about the coronavirus pandemic. While its thermal chambers cannot detect or diagnose any type of condition, they can identify high skin temperatures by monitoring the temperature without contact.
Teledyne shares fell 3.78% to $ 377.28. It closed the last trading day of the year up 0.68% at $ 391.98.