Britain’s Smiths Group on Jan. 19 said it plans to divest the explosive trace defense business of Morpho Detection, clearing the way for European regulators to approve the acquisition of the security detection company this year.
Smiths Group last April agreed to acquire California-based Morpho Detection from France’s Safran Group for $710 million. The acquisition will give Smiths Group’s Smiths Detection business a well-established product line for explosive detection systems used at airports worldwide to screen checked baggage automatically for explosives.
Morpho Detection’s Itemiser 4DX desktop explosive trace detector. Photo: Safran Group
Morpho Detection’s Itemiser 4DX desktop explosive trace detector. Smiths Group agreed to divest Morpho’s ETD line to obtain approval from European regulators to acquire Morpho Detection from Safran Group. Photo: Safran Group
Both companies develop and sell explosive trace detectors (ETD) globally and the agreement by Smiths to shed Morpho Detection’s trace product line was a condition of the European Commission’s clearance of the pending deal. Smiths Group soon plans to put Morpho’s ETD business up for sale.
The acquisition is expected to close in the first half of 2017. Smiths Group still needs to receive regulatory approvals from the United States, Brazil and Israel.
Smiths Group said the European Commission will have to approve the purchaser of Morpho’s trace business.
Currently Smiths Detection, Morpho Detection and L3 Technologies [LLL] compete for ETD sales globally. Years ago L3 was unsuccessful in bringing at self-funded ETD system to market but earlier in January the company completed its acquisition of the trace business of the former Implant Sciences, which is supply desktop ETDs to the Transportation Security Agency in the U.S., airports in Europe, and transportation agencies elsewhere.
China’s NucTech also sells ETDs.
Once the acquisition closes, Smiths Detection will have a comprehensive portfolio of solutions for screening carry-on and checked bags at airports, as well as its legacy ETD line and other inspection systems for screening parcels and cargo.
Morpho Detection had $320 million in sales in 2015.