Company makes infra-red acquisition

Edited by the Engineeringtalk editorial team Sep 17, 2007

Controlling shareholders of Cedip have agreed to sell and Flir has agreed to buy shares representing 67.8% of the share capital of Cedip.

Flir Systems is set to acquire a controlling interest in Cedip Infrared Systems, a provider of infra-red cameras and stabilised gimbaled systems.

For the fiscal year ended 31st December, 2006, Cedip reported revenue of Eur 18.2 million and operating income of Eur 3.1 million.

Controlling shareholders of Cedip have agreed to sell and Flir has agreed to buy shares representing 67.8% of the share capital of Cedip, on a fully diluted basis, for a cash consideration of Eur 19 per share or a total of Eur 41.4 million.

The transaction is subject to various closing conditions, including the authorisation of the French Minister of Finance and Economy.

Following the purchase of shares described above, Flir will launch a mandatory standing market offer in France, pursuant to which it will undertake to buy Cedip's remaining shares at the same price.

In the event that after such standing market offer, which is expected to occur by the end of January 2008 at the latest, Flir owns at least 95% of the share capital and voting rights of Cedip, the price per share to be paid to all shareholders of Cedip shall be increased by an additional Eur 0.50 per share.

Flir intends to request the delisting of Cedip from Alternext at the end of the standing market offer.

In the event all outstanding shares are purchased by Flir, total consideration paid will be Eur 62.7 million.

As of 31st December, 2006, Cedip had net cash on hand of Eur 15.0 million.

The acquisition improves Flir's international distribution network and brings new products and technology, including cooled mid-wave infra-red cameras, while also providing an important manufacturing and technology base in Europe.

Flir anticipates cost savings through integrated distribution and lower manufacturing costs from using Flir infra-red sensors in certain Cedip products.

Cedip's Polytech subsidiary, located in Eskilstuna, Sweden, specialises in mid-size, low-cost, highly stabilised gimbal systems.

Polytech's products will expand Flir's portfolio of stabilised multi sensor systems and position it to take advantage of incremental growth opportunities in Flir's government systems and commercial vision systems businesses.

Upon closing of the transaction, Cedip's infra-red camera operations will be integrated into Flir's Thermography Division.

The Polytech subsidiary will be integrated into Flir's government systems division.

"We are pleased to announce this transaction", according to Earl Lewis, Chairman, President and CEO of Flir.

"The Cedip team has an outstanding reputation for designing and manufacturing high-performance cameras and will provide Flir with complementary products and capabilities to help drive growth in key market segments worldwide".

"I welcome Cedip's dedicated and hard working employees to Flir".

Flir anticipates this transaction will be neutral to 2008 earnings and accretive in subsequent years.