OSI Systems, has signed a definitive agreement to acquire the global explosive trace detection (ETD) business from Smiths Group plc for $75.5 million in cash, subject to certain adjustments as of the closing date.
The ETD business, headquartered in Andover, Massachusetts, is a leader in trace detection with a current worldwide installed base of approximately 11,000 units. This business was acquired by Smiths in April 2017 as part of its acquisition of Morpho Detection. The closing of the transaction is subject to antitrust approval and other customary closing conditions.
“The acquisition of this ETD business is highly complementary to our current operations and this natural fit will enable us to better serve the unique needs of our customers seeking to secure airports, borders, public venues, and critical infrastructure,” said Deepak Chopra, the OSI System’s Chairman and Chief Executive Officer.
“This acquisition fills a gap in our aviation checkpoint offering that currently includes passenger screening, carry-on baggage inspection, and automated tray return solutions.”
(Learn More about Smiths Detection global explosive trace detection (ETD) business, courtesy of Smiths Detection and YouTube)
The OSI Systems expects to fund the acquisition with a combination of balance sheet cash and borrowings from its existing $525 million credit facility. The transaction is expected to be accretive to the Company’s fiscal year 2018 non-GAAP diluted earnings per share.
The acquisition of this ETD business is consistent with the Company’s strategy to expand its security offerings and will enable it to provide a full suite of checkpoint security solutions.
OSI Systems, is a vertically integrated designer and manufacturer of specialized electronic systems and components for critical applications in the homeland security, healthcare, defense and aerospace industries.
We combine more than 40 years of electronics engineering and manufacturing experience with offices and production facilities in more than a dozen countries to implement a strategy of expansion into selective end product markets.