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FLIR Systems Buys Armasight for $41M to Boost Surveillance
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FLIR Systems Inc. announced the acquisition of Armasight, Inc., a dominant developer of military optics products, precision sporting and hunting, for roughly $41 million in cash. The buyout will boost FLIR Systems’ ability to offer advanced day and night capabilities to law enforcement, military customers, hunters and wildlife enthusiasts.
Based in San Francisco, Armasight makes night vision, thermal and daylight imaging products, like rifle scopes, spotting scopes, binoculars and goggles. It also produces illuminating tools for outdoor use that allow military users to detect and identify targets from extreme ranges.
Armasight’s capabilities will build up on FLIR Systems’ scopes and sights business, and expand its operational scale. In addition, the buyout will enable FLIR Systems to leverage additional market expertise and thereby expand its footprint in the growing hunting and military scopes markets.
Armasight on the other hand, will gain from FLIR Systems’ vertically-integrated production capabilities and advanced thermal sensor capabilities to improve the products and shrink costs.
FLIR Systems will integrate Armasight's product portfolio with its existing lines of Thermal Weapon Sights and Personal Vision Systems. The combined business line will hereafter be known as FLIR Outdoor and Tactical Systems and it will be reported under FLIR Systems’ Surveillance segment.
The company expects the deal to be neutral to its 2016 net earnings and be accretive afterward.
The company’s Surveillance segment has shown strong performance in recent times. In the last reported quarter, revenues in segment jumped 10% year over year, while bookings grew 50% over the prior year, driven by robust international orders. However, the company expects an unfavorable product mix to hurt the segment’s operating margins in the immediate future.
FLIR Systems boasts strong backlog, productive R&D investments and cost reduction activities, all of which will likely translate into profitable growth.
However, in recent times, FLIR Systems’ profitability has been restricted due to currency headwinds, an unfavorable product mix and higher manufacturing costs, despite its strong top-line growth.
FLIR Systems currently carries a Zacks Rank #4 (Sell). Better-ranked stocks in the broader sector include B/E Aerospace Inc. , Huntington Ingalls Industries, Inc. (HII - Free Report) and Esterline Technologies Corp. . Each of these stocks hold a Zacks Rank #2 (Buy).
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FLIR Systems Buys Armasight for $41M to Boost Surveillance
FLIR Systems Inc. announced the acquisition of Armasight, Inc., a dominant developer of military optics products, precision sporting and hunting, for roughly $41 million in cash. The buyout will boost FLIR Systems’ ability to offer advanced day and night capabilities to law enforcement, military customers, hunters and wildlife enthusiasts.
Based in San Francisco, Armasight makes night vision, thermal and daylight imaging products, like rifle scopes, spotting scopes, binoculars and goggles. It also produces illuminating tools for outdoor use that allow military users to detect and identify targets from extreme ranges.
Armasight’s capabilities will build up on FLIR Systems’ scopes and sights business, and expand its operational scale. In addition, the buyout will enable FLIR Systems to leverage additional market expertise and thereby expand its footprint in the growing hunting and military scopes markets.
Armasight on the other hand, will gain from FLIR Systems’ vertically-integrated production capabilities and advanced thermal sensor capabilities to improve the products and shrink costs.
FLIR Systems will integrate Armasight's product portfolio with its existing lines of Thermal Weapon Sights and Personal Vision Systems. The combined business line will hereafter be known as FLIR Outdoor and Tactical Systems and it will be reported under FLIR Systems’ Surveillance segment.
The company expects the deal to be neutral to its 2016 net earnings and be accretive afterward.
The company’s Surveillance segment has shown strong performance in recent times. In the last reported quarter, revenues in segment jumped 10% year over year, while bookings grew 50% over the prior year, driven by robust international orders. However, the company expects an unfavorable product mix to hurt the segment’s operating margins in the immediate future.
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FLIR Systems boasts strong backlog, productive R&D investments and cost reduction activities, all of which will likely translate into profitable growth.
However, in recent times, FLIR Systems’ profitability has been restricted due to currency headwinds, an unfavorable product mix and higher manufacturing costs, despite its strong top-line growth.
FLIR Systems currently carries a Zacks Rank #4 (Sell). Better-ranked stocks in the broader sector include B/E Aerospace Inc. , Huntington Ingalls Industries, Inc. (HII - Free Report) and Esterline Technologies Corp. . Each of these stocks hold a Zacks Rank #2 (Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>