Flir, one of Oregon’s last big tech companies, said Monday it will sell its business to California-based Teledyne Technologies for $9 billion in cash and stock. That represents a 28% premium on Flir’s closing share price last week.
Flir makes thermal-imaging and night-vision technology for the military, domestic security and various industrial and consumer applications. Though founded in Oregon, and still nominally based in Wilsonville, the company moved its executive team to a second headquarters in Virginia in 2019.
Roughly 350 employees remain in Wilsonville, where Flir develops and markets some of its technology. Its thermal-imaging cameras enable troops to see at night and in difficult weather, increasingly coupled with aerial drones and other robotic equipment. Flir employs about 3,000 worldwide.
Oregon’s roster of tech headquarters has steadily eroded over the last 15 years, with a string of major businesses selling to larger corporations elsewhere. While technology employment has continued to grow steadily during that stretch, no big new tech companies have emerged in Oregon to replace those that sold.
Flir’s sale leaves Hillsboro-based Lattice Semiconductor and Beaverton’s Digimarc Corp. as Oregon’s last publicly traded tech companies.
Teledyne, Flir’s new owner, makes an array of sensor technologies for the industrial and defense markets. The California company said it has little direct overlap with Flir’s product portfolio and expects “complementary” technologies and “an optimized capital structure” will boost Teledyne’s profits.
Teledyne’s shares were little changed Monday at $388. The California company’s sales topped $3 billion last year, according to preliminary fourth-quarter results issued Monday.
Teledyne will pay $28 a share for Flir’s stock and 0.0718 shares of Teledyne stock for each share of Flir, which it said implies a purchase price of $56 per share.
Flir’s sales totaled $1.4 billion through the first nine months of last year, roughly flat compared to 2019. Its profits totaled $137.3 million in the first three quarters, down from $169.9 million in the same period a year earlier.
Flir’s shares jumped 23% in early trading Monday, to $38.78, following news of its pending sale.
Founded in 1978, Flir has grown steadily for decades in Oregon. The company weathered a major investigation into its corporate accounting by the U.S. Securities and Exchange Commission beginning in 2000. Flir ultimately restated two years of financial results and fired its CEO as its share price plunged.
Flir’s business turned around following the Sept. 11 terrorist attacks in 2001 as the U.S. began wars in Afghanistan and Iraq, boosting military demand for Flir’s technology. The company later sought to expand into consumer technology as military sales waned, but the consumer market never really took off and Flir has recently refocused on its defense business.
Beginning with Tektronix’s sale in 2007, Oregon’s slate of large, homegrown technology companies has dwindled to nearly none. Electro Scientific Industries, Radisys, Planar Systems, TriQuint Semiconductor, Mentor Graphics and FEI Co. all sold to larger businesses out of state.
Those companies were all decades old and it’s not unusual for businesses to sell as their businesses mature. What is unusual, though, is that no big tech companies emerged to take their place.
Oregon’s failure to produce thriving startups is partly due to the tech industry’s consolidation in major hubs, such as Silicon Valley and Seattle. And the state historically relied on hardware manufacturing, an expensive segment that has shifted offshore in recent decades.
The state lacks major research universities and other resources that have helped nurture young tech companies in other markets. Oregon hasn’t meaningfully grown the amount of venture capital it attracts from outside the region.
For the most part, though, the sale of Oregon’s older tech companies hasn’t resulted in major job losses. The new owners of Mentor Graphics and FEI both retain major operations in Oregon, for example, and other out-of-state tech companies – notably Intel, Amazon and Apple – have continued expanding in the Portland area.
Total tech employment has grown by nearly 17% over the past 15 years and the sector remains arguably Oregon’s most vital, as important to the state’s economy as the forest products industry was in the 1970s.
While Oregon hasn’t had a technology IPO since 2004, two Clark County companies – ZoomInfo and nLight – have had breakout IPOs in recent years. And Portland-based software maker Puppet says it hopes to go public sometime in 2021.