OSI Systems, Inc. (NASDAQ: OSIS) (the “Company”) today announced that it has signed a definitive agreement to acquire the global explosive trace detection (ETD) business from Smiths Group plc (“Smiths”) 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.
Deepak Chopra, the Company’s Chairman and Chief Executive Officer, said, “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. This acquisition fills a gap in our aviation checkpoint offering that currently includes passenger screening, carry-on baggage inspection, and automated tray return solutions.”
The Company 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.
Source: OSI Systems, Inc