Teledyne Technologies has made the biggest acquisition in three decades by agreeing to buy Flir Systems for $7.36 billion to support its line of remote sensors used in aerospace and defense.
According to the transaction and based on the average trading price of Flir’s stock in the past five days, the company’s shareholders will receive approximately $56 per share in cash and stock, which represents a value that is 28% higher than the last price, as it closed at $43.83 on December 31.
Teledyne said the deal, estimated to total $8 billion, will increase the company’s profits immediately after deducting acquisition costs and debt repayment of the company’s intangible assets.
Shares of Flir rose 21% to $53.03 at 9:57 a.m. New York time after rising 24%, marking their highest intraday gain since 2001.
The company’s stock suffered a 16% drop in the past year, while Teledyne’s stock rose 13% that year, but fell 4.3% on Monday to $374.97, the biggest drop in its stock on the same day in two months.
But with demand rising again, Teledyne, which has a market capitalization of $14.5 billion, is aiming for multiple acquisitions, and said in October that it has a strong budget, as well as what it described as a “strong basis for acquisitions” that will help it secure a cash flow during the coming years, knowing that it temporarily suspended its acquisition of the French company Photonis, citing conditions proposed by the French government.