GE to buy InVision for $900 million

General Electric Co. Monday said it has agreed to buy InVision Technologies Inc., which makes bomb-detection equipment, for about $900 million to expand its security technology business.

Newark, California-based InVision designs equipment to detect explosives in passenger-checked luggage. Its shares have almost doubled in price in the past year as demand for its airport security products has soared.

A GE unit, GE Infrastructure, will pay $50 a share for InVision. (MSNBC is a joint venture of Microsoft and NBC, which is a GE company.)

GE said its industrial growth businesses, which include security, are showing revenue growth of more than 20 percent from last year. The "increased visibility" will help GE reach the high end of its earnings target ranges for the first and second quarters, it said.

The acquisition of InVision will boost GE Infrastructure's ability to provide airport, mass transportation, border and power plant security, the company said. GE is also focused on improving its security offerings for chemical plants, military bases and entertainment facilities such as sports arenas.

InVision also designs X-ray technology to detect defects in industrial parts such as aluminum wheels,

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GE is paying about 8.5 times trailing earnings before interest, taxes, depreciation and amortization for InVision. That is below the industry average of about 11.5 times, according to GE.

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GE earnings are now expected to be about 32 cents per share in the first quarter and 39 cents per share in the second quarter, the company said. The forecasts exclude any impact from the Amersham acquisition or the Genworth initial public offering.

Analysts' average earnings forecasts are 31 cents per share for the first quarter and 38 cents for the second quarter, according to Reuters Research, a unit of Reuters Group Plc.

The InVision deal is expected to close in the second half of the year, according to a GE spokesman. Deutsche Bank advised InVision on the deal, he said.