Teledyne Technologies has announced it would buy FLIR Systems for $8 billion. Shareholders will receive $28 in cash and 0.0718 shares of Teledyne for each share of FLIR they hold. The deal implies a price of $56 per share of FLIR, a 40% premium to the 30-day volume weighted average price.
Roughly half of the deal value is expected to be financed through debt, so on a pro forma basis, Teledyne expects its net leverage to increase to 4x EBITDA, but to decline to 3x EBITDA by the end of 2022. The company expects the acquisition to be accretive to GAAP earnings in the first full year following the completion of the deal.
In a statement, Robert Mehrabian, Executive Chairman of Teledyne, said “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.”