Smiths Group Acquires Morpho in $710 Million Deal
Smiths Group plc announced that it has entered into an agreement to acquire Morpho Detection a California-based detection and security solutions company, from Safran S.A. for an enterprise value of $710 million. The closing of the Acquisition is subject to customary conditions, including regulatory approvals. Upon closing, Morpho Detection will be merged with Smiths Group’s Detection division.
Smiths Detection is a world leader in products and services that detect a wide range of threats, including explosive, chemical and radioactive materials, and contraband. Morpho Detection manufactures and supplies detection systems and services to improve mission-critical security at airports, borders and other high-risk critical infrastructure sites such as nuclear power plants, military installations and government buildings. It also provides extensive services to maintain and upgrade its broad installed base of equipment and related products. It is planned that the current product and service offerings of both businesses will be supported post-completion. Morpho Detection had total revenues of $320 million in 2015 with an operating margin of 18%, with aftermarket services including software representing more than half of total revenues.
Andy Reynolds Smith, Chief Executive of Smiths Group, said:
“The threat environment for people and critical infrastructure around the world is constantly evolving and becoming more complex and sophisticated. The response, to keep people safe and the world running, demands cutting-edge technology and cost-efficient solutions.
“Morpho Detection is a high quality business with a strong management team, and I am convinced that this combination provides a compelling competitive platform for product, service and technology leadership. The acquisition is consistent with our approach to increasingly focus investment in highly attractive technology-led areas, and will create significant value for shareholders and position us for long-term growth.”