FLIR Systems Inc. is moving full-steam ahead in its quest to be known as a provider of unmanned systems, not just the thermal imaging cameras, sensors, and components inside them. Wilsonville, Ore.-based FLIR this week agreed to acquire Chelmsford, Mass.-based Endeavor Robotics for $385 million in cash.
This is the latest in a series of acquisitions by FLIR over the past few years. Last month, FLIR acquired Aeryon Labs, a leading developer of aerial drones for the global military, public safety, and critical infrastructure markets, for $200 million. Aeryon’s drones are deployed by 20 militaries in over 30 countries, including the U.S. Department of Defense (DoD).
And in late 2016, FLIR purchased Norway-based Prox Dynamics, which makes nano-sized drones for military and paramilitary intelligence, surveillance, and reconnaissance (ISR) applications, for $134 million in cash.
FLIR is trying to capitalize on the DoD’s plan to increase spending on unmanned systems. In fiscal 2019, for example, the DoD has a budget of $9.6 billion for unmanned systems, which is a 28 percent increase over 2018 spending. Endeavor, which uses FLIR sensors in several of its robots, is a leading provider of unmanned ground vehicles. The company said it has sold 7,000-plus unmanned ground vehicles, which range from a five-pound throwable robot to a 500-pound heavy-lift robot, to customers in 55 countries.
“Endeavor’s momentum with the U.S. DoD and other global defense and police forces provides us significant opportunity to participate in long-term franchise programs and will help us create growth for the company,” said Jim Cannon, president and CEO of FLIR Systems.
Endeavor’s robots have been in high demand because they take the place of soldiers in many dangerous scenarios, including bomb disposal, investigation of hazardous materials, surveillance and reconnaissance, and much more. It won in January 2019 a five-year contract from the U.S. Army to modernize and maintain its existing fleet of robots, a deal that could be worth $32.4 million.
Endeavor is competing with QinetiQ for a $429 million defense contract to make 3,000 robots for the U.S. Army. A decision on this contract is expected to be made soon. If Endeavor wins the contract, it will nearly double the company’s robot sales to date and certainly make FLIR’s acquisition worthwhile.
“The more interested [the DoD] is in robotics, the better off it is for us,” Tom Frost, president of Endeavor Robotics, told The Robot Report. “This was not an unanticipated increase in spending. There has been interest in robotics from the DoD for many years and a desire to add more robots to the battlefield. They have not been shy in sharing the plan.”
Collaboration between air- and ground-based robots
While the Endeavor team expects to remain in Massachusetts, the Endeavor name and brand will eventually go away and be rolled into FLIR’s unmanned systems and integrated solutions division. Frost told The Robot Report that FLIR’s acquisitions will help usher in the next generation of defense robots.
“The next phase is collaboration between air and ground, having systems working in concert,” said Frost. He pointed to Endeavor’s participation in the DARPA Subterranean Challenge as an example. The video below shows how multiple ground-based robots and a drone could be used for coordinated exploration of caves. The solution is called CRETISE, which stands for “Collaborative Robot Exploration and Teaming in Subterranean Environments.” Endeavor teamed up with Neya Systems and Persistent Systems on the project.
“FLIR has fantastic technology in a wide variety of areas and is adding intelligence on top of their sensors to help extract information from their sensors,” Frost said. “We will also add more FLIR sensors onto our systems and advanced algorithms that use AI and machine learning.”
Does iRobot have seller’s remorse?
Endeavor spun out of iRobot in April 2016 when it was sold to Arlington Capital Partners (ACP), a Washington, D.C.-based private equity firm focused on DoD and government vendors, for $45 million. Now, less than three years later, ACP sold Endeavor for 8.5 times the purchase price. Does iRobot regret selling its former defense division too soon?
“When [iRobot] decided to carve out the division, I was GM of the defense group,” said Frost, who spent 18 years working at iRobot. “[iRobot CEO Colin Angle] and I agreed the consumer and defense businesses would do better if separated. This allowed iRobot to focus on its very successful consumer business and allowed us to focus on what we do well. They’re happy for us. [Being acquired by FLIR] only proves out the theory that both businesses would do better separate.”
So to what does Frost attribute the rapid growth and exit? While the DoD’s increased spending on unmanned systems didn’t hurt, Frost said the talented team at Endeavor still had to overcome many challenges.
“We’re not new to this. We’ve been building military robots for some time,” he said. “It takes a certain expertise to build a rugged, reliable, dependable military system that’s deployed in some of the harshest environments of the world.
“We’ve also been investing in new technologies. The U-Point Controller is a breakthrough technology that enables one controller for many robots of different sizes. We continue to invest in our autonomy as well. The robots can navigate on their own, explore buildings on their own, build readable maps on their own.
“We stepped out on our own, which was a big step. I would say hard work is the best ingredient for these types of exits, if that’s what the founders want.”