Falmouth-based Benthos to be sold to Teledyne
Teledyne Technologies Inc. has agreed to purchase Benthos Inc., the Cape-based maker of undersea-exploration products, for $17.50 a share in cash.
For shareowners, it is a boon. Shares of Benthos soared $4.39, or 35 percent, to $17 in late trading Wednesday on the Nasdaq in the wake of the announcement.
The total consideration for outstanding shares of North Falmouth, Mass.-based Benthos will be about $41 million, including payments for the settlement of outstanding stock options. The consideration will be about $31 million, taking into account Benthos' cash at June 30.
As previously announced, Benthos expects to report revenue of about $24 million for its fiscal year ended Sept. 30.
Benthos is a leading provider of oceanographic products designed for port and harbor security services, the U.S. Navy, energy exploration and oceanographic research. Benthos also manufactures a growing line of instruments for automated quality control of containers used in the food, beverage and pharmaceutical markets.
Teledyne had $1.02 billion in sales for its year ended Jan. 2, 2005. The company expects the acquisition of Benthos to be neutral to earnings.
Dr. Clyde Barrow, director of the Center for Policy Analysis at the UMass-Dartmouth viewed the announced acquisition as generally good news for the local economy.
“First, it's not clear that the Cape has "lost" Benthos as a result of the acquisition,” he said. “Another marine technology company here, Sippican Inc. was recently acquired by Georgia-based Lockheed Martin Marietta, and it doesn't appear to have affected operations or employment at the local facility. How, or if, the acquisition of Benthos affects the Cape remains to be seen.” It depends on how Teledyne decides to implement the purchase, noted Barrow
in how the acquisition is implemented by Teledyne.
Dr. Clyde Barrow, director of the Center for Policy Analysis at the UMass-Dartmouth viewed the announced acquisition as generally good news for the local economy.
“First, it's not clear that the Cape has "lost" Benthos as a result of the acquisition,” he said. “Another marine technology company here, Sippican Inc. was recently acquired by Georgia-based Lockheed Martin Marietta, and it doesn't appear to have affected operations or employment at the local facility. How, or if, the acquisition of Benthos affects the Cape remains to be seen.” It depends on how Teledyne decides to implement the purchase, noted Barrow
in how the acquisition is implemented by Teledyne.
Actually, Benthos would be the third Massachusetts oceanographic tech firm to be acquired in the past year. Battelle Memorial Institute of Ohio acquired Bluefin Robotics Corp. of Cambridge in May. Both deals involved the purchase of private companies, and terms were not disclosed.
Barrow, who recently completed a comprehensive study of the marine and oceanographic industry in Massachusetts, said he anticipated that mergers and acquisitions would eventually come to the industry. “But what is surprising is that the two recent mergers - Benthos and Sippican - were among the larger companies in the local marine science and technology industry. I suspect you will see more acquisitions or even mergers among smaller firms in the marine tech sector,” he said.
“Finally, the fact that major high-tech firms such as Lockheed and Teledyne are seeking positions in the marine-tech sector is actually a sign of their confidence that this is a growing part of the larger high tech industry,” he said. “Larger firms can bring more financial stability, research and development, global market access, and other management expertise that could benefit the industry nationally and locally.”
To read Dr. Barrow’s study on the region’s marine-technology industry, please click to:
http:www.massbenchmarks.org/publications/issues/vol7i4/5.pdf
