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Teledyne Completes FLIR Systems Buyout for $8.2B; Shares Pop 4%

Teledyne Technologies (TDY) has completed the acquisition of thermal imaging camera supplier FLIR Systems (FLIR). Following the aforementioned closure news, the share price of the industrial conglomerate rose 4% in Friday’s trading session.

Teledyne is a provider of instrumentation, digital imaging, aerospace and defense electronics, and engineered systems. The acquisition is central to the company’s goal of beefing up its portfolio of imaging sensor technology.

The cash-and-stock deal, which was announced in January this year, was valued at approximately $8.2 billion, including net debt. Per the terms of the agreement, FLIR shareholders received $28 in cash and 0.0718 shares of Teledyne common stock for each share held.

Furthermore, the deal has certain financial benefits. The purchase is expected to be immediately accretive to Teledyne’s earnings, excluding transaction costs and purchase price accounting, while it will be accretive to GAAP earnings in the first full calendar year following the closure of the deal.

FLIR will now be a part of Teledyne’s Digital Imaging segment and operate under a new name Teledyne FLIR.​

Teledyne’s Executive Chairman Robert Mehrabian said, “As a combined company, Teledyne FLIR will uniquely provide a full spectrum of imaging technologies and products spanning X-ray through infrared and from components to complete imaging systems. Teledyne FLIR will also provide a complete range of unmanned systems and imaging payload across all domains ranging from deep sea to deep space.”​ (See Teledyne Technologies stock analysis on TipRanks)

On April 28, Needham analyst James Ricchiuti increased the stock’s price target to $500 from $416 (17.4% upside potential) and reiterated a Buy rating.

Ricchiuti said, “The combination of continued strength in the standalone TDY business and strong accretion potential from FLIR supports our continued favorable investment thesis on TDY.”

Consensus among analysts is a Moderate Buy based on 2 Buys. The average analyst price target of $510 implies 19.8% upside potential to current levels. Shares have gained about 29% over the past year.

TipRanks’ Hedge Fund Trading Activity tool shows that confidence in Teledyne Technologies is currently Neutral, as 4 hedge funds increased their cumulative holdings of the stock by 84,900 shares in the last quarter.

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