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Teledyne Technologies buys e2v for £620 million

Teledyne Technologies has reached an agreement to acquire e2v Technologies for approximately £620 million. The purchase is made through Teledyne’s indirect subsidiary, Rhombi Holdings.

The British firm e2v employs approximately 1,750 people and has annual sales of £236 million. It supplies RF power, imaging, and semiconductor solutions, serving markets including aerospace, security, defence, space, medical and science, and industrial.

The acquisition brings together Teledyne Dalsa’s digital imaging products and semiconductor production capabilities – Dalsa was bought by Teledyne Technologies in 2011 – with e2v’s line of imaging solutions, including CCD and CMOS sensors for science and machine vision.

It is expected that, subject to the satisfaction or waiver of all relevant conditions, the acquisition will be completed in the first half of calendar 2017.

Revenue for e2v’s imaging segment fell by 5.1 per cent to £45 million for the six months ended 30 September 2016, with industrial vision revenue being lower than expected. However, the same period in 2015 was particularly strong, with revenue increasing 27 per cent.

Commenting on the acquisition, Dr Robert Mehrabian, chairman, president and CEO of Teledyne, said: ‘We have followed e2v for more than a decade. Over time, as both Teledyne and e2v evolved, our businesses have become increasingly aligned. In fact, every business within e2v is highly complementary to Teledyne. As important, there is minimal product overlap. For example, we are both leaders in space and astronomy imaging, but Teledyne largely provides infrared detectors and e2v provides visible light sensors.’

He added: ‘In machine vision applications, e2v's advanced capabilities in proprietary CMOS sensor design add to Teledyne's strengths in cameras and vision systems.'

Neil Johnson, chairman of e2v, said: ‘The board of e2v has considered the merits of being part of a larger, complementary group with enhanced scale and a wider range of capabilities to service its key customers and management and employees having access to the opportunities available in a larger group. The board of e2v is therefore unanimously recommending e2v shareholders to vote in favour of the acquisition.’

E2v was established in 1944 (the name originally stood for the English Electric Valve Company) when it made radar systems for air and land defence. It began designing CCDs in 1972 and, in 1996, it fabricated a CCD sensor for the Hubble Space Telescope. Its sensors have since been onboard many space missions, including on the Philae Comet Lander that touched down on the Comet 67P/Churyumov-Gerasimenko in 2014 before failing to gather enough solar energy and shutting down.

The company entered the machine vision market with the acquisition of the Grenoble site of Atmel in 2006, which gave it expertise in CMOS sensors. It has just released a new generation of global shutter CMOS sensors.

E2v acquired CMOS sensor company AnaFocus in the summer of 2014, while in October 2015 the company sold its thermal imaging business for £3.5 million.

The aggregate enterprise value for the transaction is expected to be approximately £627 million (or approximately $789 million) taking into account e2v stock options and net debt.

E2v’s directors have unanimously recommended that e2v shareholders vote in favor of the offer. In addition, Teledyne has received irrevocable undertakings from e2v directors and irrevocable undertakings or letters of intent from e2v shareholders representing approximately 46 per cent of the entire issued ordinary share capital.

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