Teledyne Technologies, Inc. (TDY – Free Report) completed the previously announced acquisition of a designer and producer of microelectronic circuits, optoelectronic components and power products, Micropac. The acquiree offers a wide range of products that serve the industrial, medical, space, military and aerospace industries.
Per the terms of the deal, Micropac’s shareholders received $20 in cash per share, free of interest and subject to the necessary withholding taxes. The all-cash transaction valued Micropac at nearly $57.3 million, based on the company’s net debt as of Aug. 24, 2024.
How Will the Buyout Benefit Teledyne?
Micropac’s acquisition is expected to strengthen Teledyne’s footprint in the aerospace and defense industry, where TDY already enjoys a strong presence. Micropac’s products, such as microelectronic circuits, optoelectronic components, and sensor and display assemblies to meet the needs of the military, industrial and medical customers, are aligned with TDY’s value generation approach.
The aforementioned factors will provide Teledyne with an opportunity to expand its customer base, enhance its product offerings and increase its market share in the industrial, medical, space, military and aerospace business areas.
TDY’s Acquisition Spree
The military industry has seen a notable rise in mergers and acquisitions recently due to many factors, like a growing emphasis on cost-reduction initiatives and diversifying their portfolio to tackle competition. These transactions are becoming more significant, allowing businesses to grow as they see fit by expanding their operations, gaining access to new skills, developing technologies and ultimately producing higher-quality goods and services.
Being no exception, Teledyne has also been engaged in a valuable acquisition, like the latest one. Prior to Micropac in March 2024, the company agreed to acquire Valeport Holdings Limited and its affiliates, a designer and manufacturer of underwater sensors for environmental, energy, construction and defense applications. Such acquisitions are expected to boost TDY’s position in the defense market.
Acquisitions Among Other Defense Players
Other defense companies that have recently indulged in valuable acquisition deals are as follows:
In August 2024, Lockheed Martin Corp. (LMT – Free Report) agreed to acquire a manufacturer of satellite products, Terran Orbital, for $450 million, which serves the aerospace and defense industry. Through this acquisition, LMT will be able to expand its customer base, enhance its product offerings and increase its market share in the satellite-based solutions business area.
LMT has a long-term (three to five years) earnings growth rate of 4.6%. The Zacks Consensus Estimate for its 2024 sales implies an improvement of 5.5% from the prior-year figure.
In July 2024, TransDigm Group, Inc. (TDG – Free Report) signed a contract to acquire an engineering, testing and measurement services provider, Raptor Scientific. This buyout is likely to be instrumental to TDG’s growth in the aftermarket business space.
TDG has a long-term earnings growth rate of 12.7%. The Zacks Consensus Estimate for its fiscal 2025 sales implies an improvement of 11.7%.
In June 2024, Curtiss-Wright Corporation (CW – Free Report) agreed to acquire Ultra Energy for $200 million in cash. The buyout is expected to expand Curtiss-Wright’s portfolio with highly complementary, crucial measurement and control solutions for upgrading current commercial nuclear power plants and designing new and advanced power plants, such as compact modular reactors.
CW has a long-term earnings growth rate of 11.7%. The Zacks Consensus Estimate for its 2024 sales implies an improvement of 8.4% from the prior-year figure.
TDY Stock Price Movement
In the past three months, Teledyne shares have risen 5.6% compared with the industry’s growth of 2.8%.
Image Source: Zacks Investment Research
TDY’s Zacks Rank
TDY currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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