Teledyne/FLIR's investor call on the acquisition from earlier today can be accessed here.
Key takeways are summarized below, and specific notes are included:
Further emphasis from Teledyne Executive Chairman Robert Mehrabian on how complementary FLIR and Teledyne are to each other, including R&D synergies, a broader portfolio to withstand downturns, and a better go to market strategy when the company can offer a range of products across all wavelengths
Teledyne said there are no plans to drastically change how FLIR operates or divest parts of FLIR's business, because "what FLIR is doing now is working for them." No one on the call discussed the specifics of commercial security/video surveillance. FLIR CEO Jim Cannon did mention FLIR's strategy over the last 2 years has moved away from commercial/consumer uses, where most of video surveillance would be, towards the industrial/defense business.
Elevated Skin Temperature (EST) screening was discussed in the call, but Teledyne noted its popularity and positives for FLIR were only temporary.
No plans to change because the way FLIR operates seems to work well for them.
Is this a joke? Them saying this shows a) Teledyne didn't do their due diligence or b) they are intentionally misleading investors - maybe a combination of both.
FLIR has experienced a mass exodus of people over the last 3.5 years - many from the Government side - most of them experienced and knowledgeable leaders and engineers. I would guess the average tenure of employees in the FLIR government division has fallen dramatically over the last three years so while Teledyne is buying a respectable legacy, the people who built that legacy have been pushed out or moved on. There is still enough there they can rebuild but it will be a rude awakening if they don't know that already.
Not to mention the Security group was absorbed into another division earlier this year during a chaotic reorg. FLIR still offers Security products but they have no real Security organization to grow that business.
There is not much that has "worked well" at FLIR over the last few years, no matter what division you look at. Hopefully Teledyne can get FLIR's house in order and help realize the potential that has always been there. But if they have no plans for change then not I'm sure that will happen.
I had the same general reaction. When they used "FLIR" and "quality" in the same sentence I almost choked on my pumpkin spice latte.
Teledyne's comments on FLIR made it sound like the due diligence was conducted over a round of golf and martinis. My guess is that their statements are all empty and being made just to minimize disruption. It seems unlikely that major changes to the legacy FLIR orgs and products would not occur. If FLIR was mostly executing well they wouldn't have had to sell BELOW their trailing 52 week high.
History has shown this is the standard boilerplate acquisition talk. We aren't making changes, everyone remain calm. Give them three years and you won't recognize the company or what's left of it. Synergies mean job loss period. Then we move production out of the US anywhere we can to cut costs and boost shareholder return. Damned the employees and customers. Seen it too many times to think anything different will happen. Loss of all the great small entrepreneurial companies will be our downfall, not that FLIR was a great example lately, but those in the business know who they were. All gobbled up by large corporations and ruined what made them great for the most part.
I would expect Teledyne to continue to market FLIR's thermal security products of thermal/optical security products, and cut everything else in the security portfolio.
The Latitude VMS has been almost stagnant from a feature perspective and customer growth perspective for the last several years now. The optical cameras are mostly OEM/ODM products with light firmware customizations, none of the them stand out as being market leading in any way. FLIR has no modern video analytics of any kind, and it would be unlikely for Teledyne to try and invest in developing that.
FLIR has gone from being a market leader in security to having little to offer that is relevant to the space, or a leading product in any way.
With or without this acquisition, FLIR had basically put themselves on a path to exit the security market. They have lost key people in the division, and the remaining ones are not known for having vision or deep market knowledge and strategy. This acquisition might just speed up the course they were already on to slowly turn off the lights in the security market.
I expect their government/military segment to grow under Teledyne, but these are the higher end products like cooled thermal cameras that just do not see much application in commercial security, even in critical infrastructure scenarios.
Excerpt from FLIR's CEO email to employees on the deal:
By joining forces with Teledyne, we will create a stronger platform for growth and innovation and be even better positioned to meet the evolving needs of our customers, drive stockholder value and create new opportunities for our employees. Together, we will offer a uniquely complementary end-to-end portfolio of sensory technologies for all key domains and applications across a well-balanced, global customer base. In addition, we have similar business models, including serving respective markets and customers with sensors, cameras and sensor systems.
Beyond the strategic and financial benefits of this transaction, what I’m really excited about is our common focus on continuous innovation and operational excellence. Importantly, Teledyne’s interest in our company is a testament to your efforts and all that we have achieved over the last forty years as a pioneer in the space. I firmly believe this transaction will enable us to build on our accomplishments and will open up new opportunities for our employees.
Next Steps: Business as Usual
The transaction is expected to close in the middle of 2021. Until then, FLIR and Teledyne remain separate companies and it is business as usual. The best way you can help is by remaining focused on our task and purpose and on your day-to-day responsibilities. Our products save lives and livelihoods, and now more than ever, our customers are counting on us to continue supporting them.
High level, nothing strikes me as deceptive, the question is what happens to individual parts of the business as the acquisition completes and priorities are adjuted.
Jim Cannon killed FLIR, and he is "really excited" about this acquisition. I seriously doubt he had much to do with it in the grand scheme of things, I think FLIR's board realized they made a bad move in hiring him and with all aspects of 2020, they were not in a good position to bring in someone new to recover his floundering.
Indeed, I feel Jim didn’t kill FLIR, after Earl stopped running the company, Andy pushed his vision to increase the commercial market and reduce dependency on Government business (Domestic and foreign).
Jim focused more than Andy on restructuring as a way to hide flaws make changes and bolster the bottom line. Perfect for a sucker acquirer to come along.
I saw no reason for the shares to hit the highs with Jim, so the drop wasn’t as bad as I expected.
Both companies (FLIR and Teledyne) are made up of many acquisitions. Let’s see who ends up where post acquisition.
Everyone of Cannon's emails when he took over addressed shareholder value. NOT one email was about taking care of the employees or customers. Latitude dev and support group gutted as were the rest of the security video group. A shame. With a different leader there could have been a much brighter outcome.
I think this is a complementary acquisition. Think of the marriage of Lidar and IR, then throw in visual light. Teledyne already does massive analytics in the transport side of they business, hopefully that will trickle down to the security side.
Maybe, but it seems like when there is an acquisition of a security company by one not so much or at all in security, it seems those synergies rarely sprout and security becomes a red-headed step child of the main company. (Apologies to any red-haired step children here.)
There are exceptions, of course, with Canon/Axis/Milestone maybe being one.
Teledyne? OOFA. Yeah, I want my surveillance product made by the same company that makes my forklift parts and my frickin WaterPick. Man, how many Tyco, Schneider, Motorola, etc experiences does this industry (and our customers) have to have shoved up our ass before someone figures out its just not a good idea?. It seems to me that the highest degree of excellence a corporation in this country aspires to is now "mediocracy thru the practice of Jack of all trades and master of none". Once the surveillance division of FLIR realizes that Teledyne bought them for non-surveillances purposes, and their division will be de-prioritized and starved to death of resources, the cynicism will fuel the apathy and the apathy will fuel the cynicism and then key or essential players in the surveillance division will start jumping off cliffs or into traffic to end their pain and the whole product line along with support goes to shit. No one cares about the customers anymore. Just sell out when the right "John" comes along.
WOW! Seems like we have a couple of angry ex-FLIR employees here. I'll bet I could name them if I wanted to out them, but they are hiding behind Undisclosed, so I will remain undisclosed as well. We shall see how this all plays out.
There was a couple of definitely bad decisions made by FLIR Security management, or better say by FLIR management in regards to the Security division. However, these were an acceptable damage and there was a good chance to withstand and recover. But (IMHO) what was slowly killing the security business was a clear lack of good decisions and strategy. I have to admit it was a bitter feeling to see how the things degrade and nothing has been done to improve the situation. FLIR Security was a great place to be in and I'm very grateful for all the things and good experience. Will Teledyne kill the business? Perhaps. But "What is dead may never die", so we shall see.
Ive never worked for FLIR. Im just someone whos paying attention. Hows it all gonna play out? Ask Tyco, Schneider, Motorola etc. What makes anyone think Teledyne is going to embrace FLIRs surveillance division above the multitude of others they already own? Its gonna be like being the middle child in a family with 9 kids. Itll take 3-5 days before someone realizes your missing.
At each of the respective company’s special meeting of stockholders held on May 13, 2021, the stockholders approved and adopted merger proposals related to the Agreement and Plan of Merger dated January 4, 2021. FLIR will now be included in Teledyne’s Digital Imaging segment and operate under the name Teledyne FLIR.