Teledyne Technologies Incorporated and FLIR Systems, Inc. have entered into a definitive agreement under which Teledyne will acquire FLIR in a cash and stock transaction valued at approximately US$8Bn.
Under the terms of the agreement, FLIR stockholders will receive US$28.00 in cash and 0.0718 shares of Teledyne common stock for each FLIR share, which implies a total purchase price of US$56.00 per FLIR share based on Teledyne’s five day volume weighted average price as of 31 December 2020. The transaction reflects a 40 per cent premium for FLIR stockholders based on FLIR’s 30-day volume weighted average price as of 31 December 2020.
As part of the transaction, Teledyne has arranged a US$4.5Bn 364-day credit commitment to fund the transaction and refinance certain existing debt. Teledyne expects to fund the transaction with permanent financing prior to closing. Net leverage at closing is expected to be approximately 4.0x adjusted pro forma EBITDA with leverage declining to less than 3.0x by the end of 2022.
Teledyne expects the acquisition to be immediately accretive to earnings, excluding transaction costs and intangible asset amortisation, and accretive to GAAP earnings in the first full calendar year following the acquisition.