Issue Date: September 7, 2009
Danaher Invests In Mass Spec
Danaher Corp., a maker of industrial and medical tools with nearly $13 billion in annual sales, has signed two deals valued together at $1.1 billion that will give it ownership of mass spectrometry maker AB Sciex and a leading bioanalytical measurements business.
In the first deal, Danaher agreed to pay $650 million for MDS’s analytical technologies division, which makes bioanalytical systems and owns half of the mass spectrometer joint venture AB Sciex. In a second deal, Danaher will pay $450 million to Life Technologies for its 50% share of AB Sciex.
Danaher says the two deals will boost annual sales of its medical technologies segment by more than $650 million to $2 billion.
The acquisition will make Danaher, the manufacturer of products such as Sears’ Craftsman hand tools, a force to contend with in the market for mass spectrometers used in drug discovery. The agreement with MDS will also give Danaher an option to purchase a half interest in a joint venture (with instrument maker PerkinElmer) that sells mass spectrometers for use in clinical diagnostics and environmental testing. And the MDS analytical acquisition will give Danaher positions in high-throughput and microplate detection systems, consumables, and instrumentation software.
Stock analyst Efraim Levy, who is with the investment advisory firm Standard & Poor’s, says Danaher has an excellent track record of integrating companies into its existing operations and improving profit margins. He also suggests that the purchases could be part of a strategic foray into the analytical instrument segment.
“They could make complementary acquisitions in the future,” Levy says. Danaher is a company that “likes to acquire businesses in a growth mode,” he adds.
Danaher’s current medical technologies businesses include precision optics for microscopes and in vitro diagnostic equipment for hospitals, blood gas analyzers, and dental office instruments.
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