The U.S. military’s plans to acquire more unmanned ground robotic vehicles and potential applications for the technology in public safety and industrial markets are driving FLIR Systems’ [FLIR] pending acquisition of Endeavor Robotics, company officials said on Wednesday.

Even if Endeavor doesn’t win some of the Army’s upcoming competitions for unmanned ground vehicles (UGVs), it “would not dampen our appetite” for the deal, Jim Cannon, FLIR’s president and CEO, said on the company’s fourth quarter earnings call.

“We have a lot of conviction about the future long term growth trajectories of unmanned capabilities, not just in DoD but also critical infrastructure, industrial applications that require standoff, hazardous material management,” he said. “You know, all the areas where we see ourselves participating in the long-term. Unmanned will continue to grow in the decades to come.”

Endeavor Robotics is teamed with Textron in an upcoming competition for the Army’s Robotic Combat Vehicle. Textron’s Ripsaw unmanned vehicle is shown here. Photo: Endeavor Robotics

Cannon also said that the unmanned systems technology and the sensors that can be coupled with these systems have made great strides in the past few years. He added that while the U.S. military is adopting UGVs, there is room for maturity here.

FLIR on Monday announced it has agreed to acquire Endeavor for $385 million from the private equity firm Arlington Capital Partners (ACP), which acquired the military robotics business of iRobot [IRBT] for about $45 million in 2016. Several financial analysts on the earnings call asked about the substantial multiple FLIR has agreed to pay for Endeavor compared with the price ACP paid three years ago.

Cannon said the vast majority of Endeavor’s existing business is with the DoD and other U.S. government customers through traditional contracts. FLIR said its work with allied governments, its ability to generate revenue through U.S. wartime spending accounts, known as Overseas Contingency Operations, and plans to bring added research and development to Endeavor, will also open new opportunities for the ground robotics company.

FLIR, which is known for its sensor and camera technology for chemical, biological, radiological, nuclear and explosives (CBRNE) detection, and intelligence, surveillance and reconnaissance operations, will also have an opportunity to provide more of these capabilities as part of Endeavor’s offerings, Cannon said.

Cannon said the deal is expected to close within 30 days. FLIR hasn’t disclosed Endeavor’s annual sales, which were about $46 million in 2014 and have more than doubled under ACP’s ownership.

In the fall of 2017, Endeavor won a potential $158 million Army contract for the Man Transportable Robotic System Increment II (MTRS II), a medium-weight, remotely operated UGV that will help warfighters detect and confirm threats such as CBRNE threats and hazards. More recently Endeavor won a $32 million Army contract to modernize and maintain several of the robotic systems the service has acquired from the company over the years.

Endeavor is competing against the U.S. division of Britain’s QinetiQ for a potential $400 million-plus Army contract for the Common Robotic System-Individual program, a back-packable, multi-mission UGV. The company is also teamed with Textron [TXT] on the Army’s Robotic Combat Vehicle program, which could result in 7,000 vehicles being acquired.

Endeavor has already sold more than 7,000 of its various UGVs to customers in over 55 countries.

Cannon said that a number of robotic programs are now “coming to fruition,” which will “amplify” the deal for Endeavor.

The MTRS II win helped give Endeavor “momentum” with the Defense Department, and the company is “well positioned for several other franchise program wins,” Cannon said.

FLIR is strategically establishing an unmanned systems business that began in 2016 with the acquisition of Prox Dynamics, a developer and producer of the Black Hornet Nano unmanned aircraft system (UAS). In January, FLIR received a $40 million contract from the Army for the Black Hornet under the Soldier Borne Sensor program and an $89 million contract from the French armed forces for the palm-size UAS system.

In January, FLIR acquired Aeryon Labs, a maker of small UAS in the Group I category, which weigh less than 20 pounds.

FLIR is also developing sensors and related capabilities for autonomous passenger vehicles and Cannon said the company is finding synergies between this work and its defense work in unmanned systems.

In the fourth quarter, FLIR’s sales fell 9 percent to $448.5 million, largely due to the divestiture of a security business. Otherwise, organic revenue was flat. Net income in the quarter nearly doubled to $98.5 million, 71 cents earnings per share (EPS), mainly due to lower taxes.

Sales in the company’s Government and Defense unit were down 3 percent to $171.1 million due to declines in CBRNE work and partial government shutdown. Operating income also was down slightly to $54.1 million.

For the year, FLIR’s sales fell a percent to $1.8 billion on the divestiture while organic revenue was up 6 percent. Net income more than doubled to $282.4 million (2.01 EPS) on lower taxes.