FLIR Systems, Inc. FLIR disclosed the acquisition of DVTEL, Inc. for about $92 million in cash. The move is at par with FLIR Systems’ strategy of undertaking acquisitions and innovating products to grab a greater market share in the Instruments segment.
Based in Ridgefield Park, NJ, DVTEL is one of the leading providers of software and hardware technologies for advanced video surveillance. The company specializes in integrated video management system software, advanced video analytics software, visible and thermal security cameras, among others.
The buyout of DVTEL will aid FLIR Systems in attaining the position of full-spectrum end-to-end security system provider. With the combination of its existing FLIR-branded thermal and visible cameras as well as its Lorex-branded security systems and DVTEL’s product portfolio, FLIR Systems will be able to cater to the small and medium enterprise, infrastructure-level markets as well as consumers.
As a matter of fact, FLIR Systems remains strongly committed toward the introduction of innovative products to expand its customer base and enhance its foothold in new markets. We believe FLIR Systems’ core strength of providing reliable and effective imaging & threat-detection technologies is expected to bolster its growth. Encouragingly, the thermal imaging market has an expected Compound Annual Growth Rate (“CAGR”) of 6.6% (as per Markets and Markets report) for 2015–2020, and this bodes well for FLIR Systems in the long term.
Increased adoption of thermal imaging in a broad spectrum of applications, ranging from military to personal hand-held cameras and Smartphones, continues to fuel growth in this market. Moreover, cost-effective and easy deployment features of these cameras, coupled with continuous price slashes, are expected to fuel growth. Hence, the abovementioned acquisition seems a strategic fit for FLIR Systems.
However, the company currently holds a Zacks Rank #4 (Sell) owing to sluggish third-quarter 2015 earnings and subsequent full-year guidance cut. Better-ranked stocks include Dycom Industries Inc. DY, Jiangsu Expressway Co. Ltd. JEXYY and Zhejiang Expressway Co. Ltd. ZHEXY. While Dycom Industries sports a Zacks Rank #1 (Strong Buy), Jiangsu Expressway and Zhejiang Expressway carry a Zacks Rank #2 (Buy).
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