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Acquisition Causes IR Imaging Market Shift

Photonics Spectra
Feb 1999
Robert C. Pini

Flir Systems Inc. has struck again, this time putting together a deal to acquire Inframetrics Inc., a commercial imaging systems manufacturer in Billerica, Mass., with 1997 sales of $53.5 million.
Flir spokesman Doug Little said Inframetrics offers a solid commercial and industrial base for sales and a good engineering work force -- in short, the opportunity to increase market share.
Azriel Biberstain, Inframetrics' chief financial officer, said the "combination of the two makes it possible to compete against Raytheon." He added that the "future of the commercial market is uncooled" infrared cameras, where Raytheon has considerable market share.
"We will have more money to do R&D, of course, but the real question is what kind of focus the R&D will have, and that is still to be determined, as are the plans for labor sharing, potential layoffs and cost-reduction calculations," Biberstain said.
However, at Mikron Instrument Co. Inc. in Oakland, N.J., officials offered a different perspective. "These types of mergers are all cost-reducing measures and have nothing to do with innovation," said K. Irani, the company's president. He predicted the combined company would be unable to maintain innovation in the sectors where it dominates: preventive maintenance, process application and research. "Right now you're almost eliminating any competition in the majority of applications," Irani said.
Greg Smoyer, vice president of business operations at Santa Barbara Infrared Inc. in Santa Barbara, Calif., pointed to a number of companies that would still compete strongly with Flir. Besides Raytheon, they include Nippon Avionics, GEC-Marconi, Land Infrared and DASA Germany.
"Mitsubishi and Kodak are also emerging strongly," he said. But as a supplier of test equipment to both Flir and Inframetrics, Santa Barbara Infrared expects sales to the combined company to drop below previous levels.
At presstime, the two companies expect quick regulatory approval. "We've both competed in every range," Little said. "So we're going to see what products to keep on both sides and what products will disappear, although I don't anticipate [that many will disappear], except for a few on the airborne side."
Little said he didn't foresee any changes in work force. "In that respect, it's a really good marriage as well."

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