LONDON – British technology company Smiths Group announced today it has entered into an agreement to acquire Morpho Detection, a California-based detection and security solutions company, from French technology firm Safran for $710 million.
In March, Safran said it was reviewing its remaining security activities after putting the Morpho business up for sale, tying its future to aviation and defense.
Morpho Detection will be merged with Smiths Group’s detection division, which provides products and services to detect a wide range of threats, including explosive, chemical and radioactive materials, and contraband.
“The threat environment for people and critical infrastructure around the world is constantly evolving and becoming more complex and sophisticated,” Smiths Group CEO Andrew Reynolds said in a statement. “The response, to keep people safe and the world running, demands cutting-edge technology and cost-efficient solutions.”
The company’s expected annual cost synergies of about $30 million will be delivered by the third full year following closing, according to a press release. The company expects mid-single digit earnings per share accretion in the first full year of ownership.
The closing of the acquisition is subject to customary conditions, including regulatory approvals. The deal is expected to close in early 2017. In the event that regulatory clearances are not obtained, Smiths can terminate the acquisition agreement and, in this case, will be required to pay a termination fee of $40 million to Safran.
