Teledyne Technologies [TDY] on Monday said it has agreed to acquire FLIR Systems

[FLIR] in an $8 billion cash and stock deal that adds new sensor technologies in aerospace, defense, commercial and industrial markets with minimal overlap, while also providing it with unmanned systems in air and ground applications.

The acquisition is expected to close in mid-2021 subject to approvals by U.S. regulators and shareholders of both companies. The boards of both companies have approved the deal.

If the deal is approved, Teledyne would have about $5 billion in annual sales factoring in $1.9 billion in FLIR revenue.

Teledyne provides instrumentation, digital imaging, electronics systems, and engineered systems across various markets. FLIR is a leading provider of digital imaging systems—primarily infrared cameras—for various markets as well, and the company has also made several acquisitions giving it products and capabilities in small unmanned aircraft systems and robotic ground vehicles.

“At the core of both our companies is proprietary sensor technologies,” Robert Mehrabian, Teledyne’s executive chairman, said in a statement. “Our business models are similar: we each provide sensors, cameras and sensor systems to our customers. However, our technologies and products are uniquely complementary with minimal overlap, having imaging sensors base on different semiconductor technologies for different wavelengths.”

Teledyne’s sensor technologies are primarily based on X-rays, ultraviolet, visible light, microwave and radio, where as FLIR is primarily centered in the infrared space. Teledyne has a niche infrared detector technology and FLIR does have capabilities in the visible light area with its electro-optic sensors.

FLIR also develops and makes sensors used in detecting chemical, biological, radiological, nuclear and explosive threats.

Instrumentation sales make up 36 percent of Teledyne’s roughly $3.1 billion in annual revenue, followed by digital imaging products with 32 percent, aerospace and defense electronics with 19 percent and engineering systems with 13 percent, according to a pie chart Teledyne posted on its website as part of an analyst presentation to discuss the deal. A separate pie chart says all of FLIR’s sales come from digital imaging.

The combined company’s sales would include 59 percent of the business coming from digital imaging products, 21 percent from instrumentation, 12 percent with aerospace and defense electronics, and 8 percent engineered systems, Teledyne said.

Teledyne expects the acquisition to be accretive to earnings in the first full calendar year following the deal’s close. The agreement calls for Teledyne to pay FLIR stockholders $56 per share, half in cash and half in Teledyne stock. Teledyne said the deal price represents a 40 percent premium for FLIR stockholders based on FLIR’s 30-day volume weighted average price as of Dec. 31, 2020.

Teledyne is taking out a new $4.5 billion credit facility to fund the deal and refinance some of its existing debt.

FLIR’s financial adviser on the deal is Goldman Sachs and Teledyne is being advised by Evercore.

Teledyne also announced preliminary financial results for its fourth quarter, with sales expected to be about $800 million and per share earnings between $3.16 and $3.19, a record for any quarter in the company’s history.