FLIR To Acquire Inframetrics

By: Kristin Lewotsky

In a move that further consolidates the thermal imaging market, FLIR Systems has acquired Inframetrics Inc. of Billerica, MA for approximately $49.1 million in stock, plus assumed debt. FLIR will issue approximately 2.3 million shares (at 21 3/8 as of this writing) of common stock to the shareholders of Inframetrics in exchange for that company's outstanding shares.

The acquisition has raised some eyebrows in an industry that has already witnessed the number of players dwindle with the Raytheon acquisition of Amber and the FLIR acquisition of Agema. Despite the fact that the current deal is FLIR's second acquisition in this area, vice president of corporate operations James Fitzhenry hastens to point out that the company is not trying to buy up the industry. "The acquisitions [Inframetrics and Agema] are in the context of a market that is growing rapidly and dominated by far bigger companies with vastly bigger resources than FLIR," he said. "We make acquisitions where they make strategic sense, combining forces," he said, "to do battle with Raytheon, for example, which has every intention of increasing its presence in communication marketplace."

With year-to-date sales of $104.1 million for FLIR and $41.8 million for Inframetrics, the combination is certainly more modest than defense electronics juggernaut Raytheon, will 1997 revenues of $13.7 billion, so Fitzhenry may have a point.

Plans currently call for FLIR to maintain operations at the Inframetrics Billerica, MA facility; Inframetrics head Jay Teich will continue as general manager in the aftermath of the acquisition. "There will have to be some decisions made in terms of rationalizing some product lines," Fitzhenry acknowledges. "We're in that process of evaluation now. One of the benefits is that we can better allocate R&D dollars so we can better bring product to the market more quickly."

Inframetrics will be folded into the FLIR corporate structure, though no final decision has been made on the name at this time. In the case of the Agema acquisition, FLIR retained the Agema brand name for certain products; that approach may be taken for the Inframetrics name as well.