FLIR Systems Inc. (FLIR) has completed the acquisition of ICx Technologies Inc for $268 million, implying an enterprise value of $232 million. The closing cash balance of ICx is $36 million.
The acquisition strengthens FLIR’s capabilities in advanced sensors for chemical, biological, radiological, nuclear and explosives (CBNRE) detection for the defense and security markets.
FLIR produces invisible infrared cameras and night vision technology, which are used at all American airports. FLIR’s equipment is also used to protect nuclear facilities and U.S. bases in Afghanistan. Bullishness on FLIR is attributed to rising orders and what seems to be an attractive valuation. FLIR is a pure play in the thermal imaging and infrared technology space, an area that boasts immense growth potential.
The company has developed extensive competencies in the design and integration of numerous capabilities and payloads into integrated systems or sub-systems. Competencies such as stabilization, packaging and systems integration allow it to effectively combine a wide variety of technologies and payloads to design and manufacture complex systems to suit its customers’ needs.
The company derives significant revenues from contracts or subcontracts with U.S. government agencies. The funding of contracts awarded to the company depends on the overall US government budget and appropriation process, which is beyond its control.
Flir Systems Inc. is a leader in the design, manufacture and marketing of thermal imaging systems. Its products are used in a wide variety of applications in commercial, industrial and government markets, internationally as well as domestically. It offers a variety of system configurations to suit specific customer requirements. Its business is organized into three divisions: Government Systems, Commercial Vision Systems and Thermography Products.
We currently have a Neutral recommendation on FLIR Systems.
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