Teledyne buys Dalsa in MEMS play

SAN JOSE, Calif. - Moving into MEMS and other markets, Teledyne Technologies Inc. has entered into a definitive agreement to acquire Dalsa Corp. for $336 million.

Teledyne Technologies is a provider of electronic components and subsystems, instrumentation and communications products.

Headquartered in Waterloo, Ontario, Canada, Dalsa sells digital imaging products and solutions, in addition to manufacturing custom MEMS products. Dalsa's imaging products and services include CCD and CMOS imaging sensors, electronic digital cameras and image processing software for use in industrial machine vision, advanced medical imaging and high resolution aerial and satellite imagery.

STMicroelectronics Inc. led the MEMS foundry business with some 40 percent share in 2009, according to Yole Developpement. Some 19 percent growth pushed Dalsa past Micralyne Inc. to become the largest of the pure-play MEMS foundries with $31 million in sales in 2009, according to the firm.

Dalsa moved into third place overall, closing the gap with number two Texas Instruments Inc., which saw its foundry business slip 24 percent last year to $45 million, according to the firm.

The Canadian government this month announced that the MiQro Innovation Collaborative Centre (MICC) in Bromont, Quebec, will receive a $14.1 million grant as part of the Canadian government’s Centres of Excellence for Commercialization and Research (CECR) program. Dalsa is one of the founding partners in the MICC along with IBM Canada and the Université de Sherbrooke. The MICC houses some of the ''world’s most sophisticated equipment'' for 200-mm based microelectromechanical systems (MEMS) and 3-D wafer level packaging.

“Teledyne and Dalsa are each acknowledged leaders in digital imaging technology but our product lines and customer bases are almost entirely complementary,'' said Robert Mehrabian, chairman, president and CEO of Teledyne, in a statement. “The combined strengths of Teledyne’s and Dalsa's leading imaging technologies will allow us to develop new infrared and visible light products that serve our respective markets and customers. Furthermore, Dalsa's custom MEMS capabilities will be augmented by having access to Teledyne’s extensive MEMS research activities and advanced process technologies.

For the twelve months ended Sept. 30, 2010, Dalsa had sales of approximately $198.2 million. The definitive agreement contains a termination fee in the amount of approximately $10 million, which is payable by Dalsa to Teledyne in certain circumstances if the transaction is not completed.

Teledyne is a diversified player. Last year, Teledyne was awarded a contract from the Defense Advanced Research Project Agency's (DARPA) Microsystems Technology Office to develop terahertz electronics devices and integrated circuits. Under DARPA's Terahertz Electronics (THz) program, the firm will pursue ''revolutionary'' advances in transistor technology, circuit design and circuit packaging to demonstrate receiver and transmitter blocks operating at frequencies greater than 1.0 THz. The initial Phase 1 contract was valued at $8.3 million over a 24 month period. If all contract Phases proceed, the total contract value would be $18.8 million for work performed through 2014.

In March of 2010, Teledyne announced that its subsidiary, Teledyne Scientific & Imaging, LLC, acquired a minority interest in Optical Alchemy Inc. Optical Alchemy, located in Nashua, N.H., is a designer and manufacturer of ultra-light electro optical gimbal systems.

In June, Teledyne acquired Optimum Optical Systems, Inc. Optimum Optical, located in Camarillo, Calif., is a designer and manufacturer of custom optics and optomechanical assemblies. Also in June, Teledyne acquired Intelek plc. Intelek is a group of companies which primarily designs and manufactures electronic systems for satellite and microwave communication.

In September, Teledyne announced today that its subsidiary, Teledyne Benthos Inc.,  acquired Hafmynd ehf. Hafmynd, located near Reykjavik, Iceland, designs and manufactures the Gavia, an autonomous underwater vehicle (AUV) that is capable of carrying out survey missions for commercial, scientific and defense applications. The Gavia AUV's modular architecture enables sensors to be easily integrated and lithium ion battery packs to be exchanged in the field.  

This month, Teledyne and AVIC International Holding Corp. announced an agreement to sell Teledyne's general aviation piston engine business to Technify Motor (USA) LTD., a subsidiary of AVIC International, for $186 million in cash.

Teledyne recently reported third quarter 2010 sales of $443.9 million, compared with sales of $429.4 million for the same period of 2009. Net income for the third quarter of 2010 was $30.3 million, or $0.82 per diluted share, compared with net income of $35.1 million, or $0.96 per diluted share, for the third quarter of 2009. The third quarters of 2010 and 2009 include tax credits of $2.9 million and $9.3 million, respectively. The third quarter of 2010 also includes after-tax charges of $1.8 million for acquisition-related costs.