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.

The purchase is the second substantial instrumentation deal announced this summer. In July, Agilent Technologies agreed to buy bioanalytical instrument maker Varian in a transaction worth $1.5 billion (C&EN, Aug. 3, page 7).