Smiths Group to pay $710m for Morpho Detection
LONDON—Smiths Group, a global technology company based here, announced April 21 it has an agreement to acquire Morpho Detection from Paris-based Safran for $710 million.
Based in Newark, Calif., Morpho Detection had $320 million in revenues in 2015, and an operating margin of 18 percent, with aftermarket services including software representing more than half of total revenues, according to Smiths Group. It has 860 employees and Morpho Detection had gross assets of $699 million.
Morpho Detection makes detection systems for airports, borders, government buildings and critical infrastructure. It also provides services and maintenance for its products. Morpho Detection customers include the TSA and numerous international airports including Heathrow.
Morpho Detection will become part of Smiths Detection, one of five Smiths Group divisions. Smiths Detection manufactures products and provides services that detect explosive, chemical and radioactive materials, and contraband.
Smiths Group said it will support the product and service offerings of both businesses.
Andy Reynolds Smith, chief executive of the Smiths Group, in a statement said the deal will “strengthen Smiths Group’s ability to develop and compete in attractive global threat detection segments with strong fundamentals, which are expected to grow by mid-single digits per annum over the medium to long term.”
The consideration payable to Safran will be funded from a combination of Smiths Group’s existing cash resources and available committed bank facilities.
The deal is expected to close in early 2017. It is subject to regulatory clearances in the US, Europe and certain other territories and other closing conditions.