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FLIR buys traffic detection firm

31 Dec 2012

Infrared technology giant continues diversification with $46M acquisition of Belgium’s Traficon.

FLIR Systems, the company best-known for its expertise in infrared photonics technology, is to further diversify its business with the acquisition of Belgium-based Traficon International.

Traficon, based in Wevelgem, is described as “a global leader in video image processing software and hardware for traffic analysis”. The $46 million, all-cash move, follows hot on the heels of FLIR’s acquisition of consumer video surveillance specialist Lorex Technology – completed just over a week ago.

Both deals are designed to expand FLIR’s reach into new commercial markets for the company, and come at a time when the US defense budget – traditionally representing the single largest chunk of FLIR’s overall sales – is becoming squeezed and may be impacted by the so-called “fiscal cliff”.

Traficon’s technology is used in automatic detection of road traffic incidents, as well as data collection, and intersection vehicle and pedestrian presence detection. Over the past 25 years, the company has delivered more than 80,000 video-based transportation control and monitoring systems around the world – including installations in more than 500 tunnels.

Current projects include two systems to monitor traffic in Sweden, at the Södra Länken and Norra Länken tunnels in Stockholm, while more than 70 image processing boards are being installed at London’s Dartford Tunnel – a critical link below the River Thames and one of the busiest stretches of road in the UK.

Traficon corporate video:

Leveraged MBO
FLIR believes that its infrared expertise will be a good fit for that market, with night-time detection the most obvious applications area. Earl Lewis, president and CEO of the Portland, Oregon, headquartered company saying. “We have shown that thermal imaging is a superior solution for monitoring traffic.”

“This acquisition will accelerate the adoption of FLIR technology in the expanding worldwide market for video-based traffic control solutions as we utilize Traficon's strong distribution network,” Lewis added. “Additionally, Traficon's video analytics capabilities will be integrated into our other imaging lines of business offering enhanced functionality and the development of new applications.”

In Traficon’s statement on the deal, CEO Lode Caenepeel said: “Traficon and FLIR Systems have been working on joint projects for over a year, combining Traficon’s video detection algorithms with FLIR’s thermal imaging technology.”

“Already there we saw great synergies between both companies and many interesting possibilities for future collaboration. That is why we believe the choice of FLIR as a partner for future growth is a logical one.”

The deal sees FLIR acquire the shares in Traficon previously owned by the Heverlee, Belgium, private equity company Indufin, as well as those held until now by the Traficon’s management team and employees.

Indufin had invested in Traficon in December 2008 - at the height of the global financial crisis - via a leveraged management buy-out designed to grow the company. That deal meant that more than 30 Traficon employees became shareholders, and came nearly 30 years after the development of the company’s technology was begun – initially via research into CCD camera detection of traffic data at the University of Louvain’s ESAT laboratory.

The first industrial prototype appeared in 1983, before Traficon was subsequently founded by Jo Versavel in 1992. The company now has offices across Europe as well as in Las Vegas, Shanghai and Beijing, and in Brazil.

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