Acquisition Examined

Author: John Honovich, Published on Jun 04, 2009

This week, Thermal/IR manufacturer Axsys was acquired by General Dynamics for $643 M USD. That's a high sum for a security/video surveillance company. However, look at their Q1 financial performance and notice that revenue is high ($250M USD annual revenue run rate). While the acquisition price was 2.5 x revenue, it was only 22 x earnings.

This acquisition is not likely representative of the broader market. Axsys' profitability and relatively low number of direct competitors is in contrast to other segments in the market (e.g., IP video software, video analytics).

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