Teledyne Technologies, Inc.

Teledyne Technologies is an American industrial conglomerate that provides enabling technologies for industrial growth markets. Teledyne evolved from a company that was primarily focused on aerospace and defense to one that serves multiple markets that require advanced technology and high reliability. These markets include deepwater oil & gas exploration and production, oceanographic research, air and water quality environmental monitoring, electronics design and development, factory automation and medical imaging. The company was founded in 1960 as Teledyne, Inc. by Henry Singleton and George Kozmetsky and is primarily based in the USA but has global operations.

Teledyne’s products include monitoring and control instrumentation for marine and environmental applications, harsh environment interconnects, electronic test and measurement equipment, digital imaging sensors and cameras, aircraft information management systems and defense electronics and satellite communication subsystems. Total sales in 2012 were over 2 billion USD. Teledyne’s operations are primarily located in the USA, Canada, the UK and Mexico.

From August 1996 to November 1999, Teledyne existed as part of the conglomerate Allegheny Teledyne Incorporated, a combination of the former Teledyne, Inc. and the former Allegheny Ludlum Corporation.

In November 1999, three separate entities, Teledyne Technologies, specialty metals company Allegheny Technologies (ATI) and personal and oral health care product company Water Pik Technologies, were spun off as freestanding public companies. Allegheny Technologies retained several companies of the former Teledyne, Inc. that fit with Allegheny’s core business of steel and exotic metals production.

At various times, Teledyne, Inc, had more than 150 companies with interests as varied as insurance, dental appliances, specialty metals, and aerospace electronics. Many of these companies had been divested prior to the merger with Allegheny. The new Teledyne Technologies organization was initially composed of 19 companies that were earlier in Teledyne, Inc. By 2011, Teledyne Technologies had grown to include nearly 100 companies.

Business Segments

Teledyne Technologies currently operates with four major segments: Digital Imaging, Instrumentation, Engineered Systems, and Aerospace and Defense Electronics.

Digital Imaging
This segment handles sponsored and central research laboratories for a range of new technologies, as well as development and production efforts in digital imaging products for government applications. Included are infrared detectors, cameras, and opto-mechanical assemblies.

Instrumentation
Providing monitoring and control instruments for marine, environmental, scientific, industrial, and defense applications as well as harsh environment interconnect products.

Engineered systems
Provides systems engineering and integration, advanced technology application, software development, and manufacturing solutions to space, military, environmental, energy, chemical, biological and nuclear systems, and missile defense requirements. It also designs and manufactures hydrogen gas generators, thermoelectric and fuel-based power sources, and small turbine engines.

Aerospace and defense electronics
This segment provides complex electronic components and subsystems for communication products, including defense electronics, data acquisition and communications equipment for air transport and business aircraft, and components and subsystems for wireless and satellite communications (Paradise Datacom products) as well as general aviation batteries.

The company has a rich history and we give you an interesting overview of the keystones that formed the organization. We are focused on satellite related companies and in this case we are mentioning Teledyne Paradise Datacom (acquired in 2010) and E2V Technologies, Ltd. (acquired in 2017). Both satellite equipment manufacturers are operating in the Aerospace & Defense Electronics Division of Teledyne.

Company History

In June 1960 George Kozmetsky and Henry Singleton, both previously executives at defense contractor Litton Industries, Inc, (now owned by Northrop Grumman) formed a firm named Instrument Systems located in Beverly Hills, California, USA. The firm was financed with a 450,000 USD investment by venture capitalist Arthur Rock. Their basic plan was to build a major firm centering on microelectronics and control system development, primarily through acquiring existing companies.

Early years

In October 1960 the firm made its first acquisition by purchasing the majority of stock in Amelco, a small electronics manufacturing plant. In the meanwhile the rights to the name Teledyne and associated logo were purchased. In addition to Amelco, two other electronics-manufacturing firms were acquired and by the end of 1960, Teledyne had about 400 employees and 7,400 m2 (80,000 square ft.) of floor space dedicated to engineering development and manufacturing. Teledyne had sales of almost 4.5 million USD.

Teledyne’s growth continued in 1962 with the acquisition of companies primarily through equity agreements. Internally, Teledyne Systems was formed as the centerpiece of the firm’s aerospace systems business, diversifying the business base into government contracts with NASA and the U.S. Department of Defense. By the end of the second fiscal year, Teledyne sales had increased 230% and net income by about 570%.

Over the next three years, new companies were acquired in microwave and power electrical products – including the first consumer products. Teledyne Controls was established, moving the Company into the field of hydraulics. Teledyne entered the optics field with the acquisition of Kiernan Optics, producing windows for the Apollo spacecraft and infrared optical domes for missiles.

In early 1965 Teledyne won a large contract from the U.S. Navy for the Integrated Helicopter Avionics System (IHAS) giving Teledyne a name in the military market. This caused a major jump in the stock price, from 15 to 65 USD. By the end of the fiscal year, Teledyne had acquired 34 companies, sales were 86 million with net income of 3.4 million USD and there were about 5,400 employees.

Further growth in the 60’s

In June 1966 Kozmetsky left to become dean of the School of Business Administration at the Austin based University of Texas. In July 1966, Vanadium-Alloy Steel Co. (VASCO), including its subsidiary Allvac, was merged into Teledyne. This expanded the company into the Eastern U.S. and started the formation of material technologies as a major business activity of Teledyne. With the merger, Singleton turned his position of President over to George A. Roberts, a close friend from Naval Academy days, who had headed VASCO.

Singleton and Roberts continued in acquiring new companies and in 1967 one of the largest of companies was Brown Engineering, a firm with about 3,500 employees headquartered in Huntsville, Alabama, USA. With NASA and Government contracts for engineering services and research, Brown Engineering added a new line of business for Teledyne.

In 1968 Ryan Aeronautical in San Diego was acquired. Ryan was the largest producer of unmanned drones for the military and owned Continental Motors, a general aviation and aircraft engines manufacturer. This acquisition brought Teledyne into the piston-powered engine business with both commercial and military customers.

In the remainder of the 1960s, Teledyne acquired some 90 more companies. A number of these businesses were in consumer products, such as Water Pik, Acoustic Research with high-fidelity speakers, and Olson Electronics that operated retail stores across the USA. Packard Bell had both consumer and government sales in computers and television receivers. A number of electronic product lines and smaller acquisitions were consolidated in Teledyne Electronics and Teledyne Microelectronic Technologies. Two acquired firms, Geophysical Exploration and Geotronics, brought Teledyne into offshore drilling and earth-science instrumentation fields. Twenty-one acquired companies were in the metals business including manufacturing company Wah Chang (in 2014 renamed ATI Specialty Alloys and Components after Teledyne merged with Allegheny Techologies Inc.) and Cast Products, and this led to the acquisition of firms producing industrial machines and machine tools. Other diverse acquisitions included Monarch Rubber, Sewart Seacraft, Isotopes, Radar Relays and Getz Dental.

Singleton also added a diverse group of financial institutions, giving Teledyne contact and intimacy with the capital world. These included thrift and loan banks and insurance firms dealing with property, workers compensation, casualty, and life insurance. Most of the insurance investments were later consolidated into the Argonaut and Unitrin subsidiaries, and were ultimately spun off as independent companies.

Teledyne was divided into Groups, and by the end of the 1960’s; there were 16 Groups with 94 profit centers in 120 locations. Company presidents were given considerable freedom in their operations but Corporate maintained close financial control and capital management. In 1969 Teledyne sales were 2.7 billion USD.

Peak and decline

In 1980 Teledyne sales passed the 3 billion USD. In the race between the U.S. and the Soviet Union, government sales reached almost 800 million USD. The first significant drop in Teledyne business began in 1985. Sales for 1984 had been about 3.5 billion USD, but decreased to around 3.2 billion USD the next year and remained essentially flat for the remainder of the 80’s.

In April 1986 Singleton (69) turned the position of CEO over to his friend George Roberts, but remained as Board Chairman. After guiding Teledyne for 29 years, Singleton retired as an employee and officer in 1991. William P. Rutledge was named President and CEO when Roberts retired in 1993.

Many companies had been sold during the 80’s and beginning of 90’s and in 1993, through consolidations, the number was further reduced from 65 to 18. In January 1995, Teledyne Electronic Systems was sold to Litton Industries, essentially ending the business on which Teledyne had originally been formed.

In the early 90’s, while the company underwent these turnovers in leadership, two lawsuits were brought against Teledyne by whistleblowers under the False Claims Act. The suits charged the company with falsifying test reports for relay devices sold to the US government for weapons and spacecraft use, and with padding government contract cost estimates. In April 1994, Teledyne settled both cases for 112.5 million USD, at the time one of the largest settlements by military contractors.

In late 1994, Teledyne was subjected to a hostile takeover attempt by WHX Corporation. This was successfully challenged but the Teledyne pension fund had a surplus of 928 million USD and this was of wide interest. To forestall further hostile takeovers, Allegheny Ludlum, a steel and specialty metal firm, offered to serve as a white knight friendly acquirer. On August 15^th 1996 an agreement was reached to merge Teledyne with Allegheny Ludlum, forming Allegheny Teledyne, Inc. (ATI), with headquarters in Pittsburgh, Pennsylvania.

After some reorganization, ATI operated with three segments: Aerospace and Electronics, Specialty Metals, and Consumer Products. The former Teledyne high-technology companies were mainly in the A&E Segment, led by Robert Mehrabian. ATI eventually decided to spin off the segments into independent entities, and on November 29^th, 1999, Teledyne Technologies Incorporated, Allegheny Technologies Incorporated, and Pik Technologies, Inc., was formed.

Renewal

With Robert Mehrabian as Chairman, CEO and President, Teledyne Technologies was initially composed of 19 companies all-dating from the original Teledyne, Inc. with about 5,800 employees. One of the companies, Ryan Aeronautical, was sold to Northrop Grumman before the end of the year to raise initial operating capital.

In 2000, its first full year of operation, Teledyne Technologies had sales of 795 million USD. The renewed Teledyne operated in much the same manner as Singleton’s early Teledyne, functioning as a conglomerate with growth mainly due to acquisitions. In 2010, the sales were 1,644 million USD. About 44% of the 2010 sales were derived from contracts with agencies of, or prime contractors to, the U.S. government. By the start of 2011, there were near 100 companies, functioning in a wide range of products and services.

In July 2010 Teledyne acquired Intelek, Plc, a leading designer and manufacturer of electronic systems for satellite and microwave communications, in a 52 million USD deal. Intelek consisted of various divisions that were integrated into the Teledyne organization. The Intelek’s Paradise Datacom division became Teledyne Paradise Datacom.

On March 28^th 2017 Teledyne announced that it had acquired UK based E2V Technologies, Plc. for 789 million USD. E2V provides high performance image sensors for the machine vision and space market. E2V was also a manufacturer of high reliability semiconductors and radio frequency communication applications (TWTA’s & SSPA’s).  E2V’s Stellar-series of Amplifier products was acquired in 2014 by a newly formed business named Space Path Communications based in the UK.

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Resources

www.teledyne.com
www.continentalmotors.aero
www.wikipedia.org
www.bloomberg.com
www.northropgrumman.com
www.curtiss-wright.com
www.sky-brokers.com
www.paradisedata.com
www.e2v.com
www.e2v-us.com
www.stellarsatcom.com
www.space-path.com