Web Date: September 19, 2012
Danaher Will Buy Diagnostics Firm
The industrial and medical instrumentation giant Danaher has signed an agreement to acquire Iris International, a maker of automated urinalysis diagnostic systems and consumables, for $338 million. The $19.50 per share that Danaher will pay Iris shareholders represents a 45% premium over the firm’s closing stock price on Sept. 14.
Pending regulatory and shareholder approvals, expected by the end of the year, Iris will become part of Danaher’s Beckman Coulter unit, a provider of automated blood analysis equipment to hospitals and clinics. Danaher also owns the mass spectroscopy company AB Sciex. Iris had sales of $118 million in 2011 and net income of $1.8 million, excluding unusual charges.
Iris CEO César M. Garcia says his firm will benefit in the deal “from being a part of a larger organization with significant resources to enable the acceleration of its diversified product pipeline.”
In addition to urinalysis equipment, Iris makes centrifuges found in hospitals. It also developed what it calls the Nucleic Acid Detection Immuno-Assay, or NADiA. The technology is the basis of a prognostic assay for prostate cancer that Iris says can reduce the need for follow-up treatment after surgery. The firm is developing other oncology applications for the technology.
Iris will be the latest in a string of diagnostics firms purchased by major scientific instrument makers, which see growth opportunities in the business and synergies with their instrument units. Danaher itself vaulted to the top of C&EN’s ranking of instrument makers by acquiring Beckman Coulter last year for $6.8 billion. Other recent acquisitions include Thermo Fisher Scientific’s purchase in July of transplant diagnostics firm One Lambda for $925 million, and Agilent Technologies’ $2.2 billion buy in June of cancer diagnostics maker Dako.
In a note to investors, Peter Lawson, an investment analyst at Mizuho Securities USA, says Danaher’s acquisition of Iris “highlights the consolidation we are experiencing in the diagnostics space.” More than $13 billion in related mergers and acquisitions took place in 2011, he notes, and another $7 billion in activity has occurred since the beginning of 2012.
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