By Christiana Sciaudone
Investing.com -- Flir Systems (NASDAQ:FLIR) jumped 22% after Teledyne said it would acquire the thermal imaging camera and sensor company for about $8 billion in cash and stock.
FLIR stockholders will receive $28 per share in cash and 0.0718 shares of Teledyne common stock for each FLIR share, which implies a total purchase price of $56 per FLIR share based on Teledyne’s 5-day volume weighted average price as of Dec. 31. The transaction reflects a 40% premium for FLIR stockholders based on FLIR’s 30-day volume weighted average price as of Dec. 31.
Teledyne expects the acquisition to immediately add to GAAP earnings in the first full calendar year following the acquisition.
Teledyne, which is up 16% over the past 12 months, dropped almost 4% on the news. Revenue for the buyer has dropped over the past three quarters, though profit has beat in the past two reporting periods.
Flir missed revenue estimates in its more recent quarterly report, but beat for profit, coming in at 64 cents versus the expected 55 cents, according to data compiled by Investing.com.
In addition to the purchase, Teledyne also announced that it expects to report fourth quarter sales of about $800 million, versus $749 million in the previous quarter. Diluted earnings per share are expected to be in the range of $3.16 to $3.19, a record for any quarterly period and compared with the prior outlook of $2.56 to $2.86.
“Our technologies and products are uniquely complementary with minimal overlap, having imaging sensors based on different semiconductor technologies for different wavelengths,” said Teledyne Executive Chairman Robert Mehrabian in a statement. “Together with FLIR and an optimized capital structure, I am confident we shall continue delivering superior returns to our stockholders.”
The transaction, which has been approved by the boards of directors of both companies, is expected to close in the middle of 2021.