InVision Says It May Face Probes
Bomb-detection equipment maker InVision Technologies Inc. disclosed Friday that it may face two federal investigations, threatening its pending $900-million acquisition by General Electric Co.
InVision, based in Newark, Calif., said the Department of Justice and the Securities and Exchange Commission may launch investigations after the company’s own inquiry turned up possible improper payments by distributors in connection with sales outside the U.S.
InVision said it had been conducting the internal investigation in consultation with GE. Both sides have the right to terminate the deal if it does not close by Oct. 31.
InVision said it met with representatives of both federal agencies Thursday.
The internal investigation and any related investigation by either federal agency may not be completed by Oct. 31.
In a separate statement Friday, GE said it was hopeful it could conclude a deal.
“GE continues to want to conclude the acquisition and is hopeful that this matter will be resolved,” the company said.
General Electric agreed to buy InVision, the largest maker of explosives detectors used in U.S. airports, in March, as the company builds its security-equipment business.
Subsequently, the SEC opened an inquiry into trading in InVision options in the days leading up to the deal’s announcement. In June the two companies announced a memorandum of understanding to settle lawsuits related to the deal.
Shares of GE rose 4 cents to $33.25 on the New York Stock Exchange. InVision shares rose 6 cents to $49.66 on Nasdaq.
InVision would become a cornerstone of GE’s security business, which builds video surveillance systems and devices to detect explosive materials.
InVision’s CTX machines are deployed in 7 out of 10 major U.S. airports, and analysts expect demand for the $1-million scanners to continue to grow.
The company is one of only two firms certified by the U.S. Transportation Security Administration to provide baggage scanners that search for bombs and explosives.
Roughly 80% of InVision’s 1,000 workers are in California.
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Bloomberg News and Reuters were used in compiling this report.
