Log in
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Dynamic quotes 

MarketScreener Homepage  >  News  >  Economy & Forex  >  All News

News : Economy & Forex
Latest NewsCompaniesMarketsForexCryptocurrenciesCommoditiesInterest RatesBusiness LeadersFinance Pro.CalendarSectors 
All NewsEconomyCurrencies / ForexCryptocurrenciesEconomic EventsPress releases

Danaher to Buy Pall, Split Up Businesses -- 2nd Update

share with twitter share with LinkedIn share with facebook
share via e-mail
05/13/2015 | 03:33pm EST
By Bob Tita 

Danaher Corp. intends to break itself in two separate companies next year, becoming the latest industrial conglomerate to isolate business units viewed as having strong growth potential from cyclical, slower-growing business lines.

As part of the breakup, Danaher will acquire filtration equipment make Pall Corp. for $13.6 billion to fortify a revamped business portfolio focused on science, health care and technology markets. Danaher plans to divest its industrial units by assembling them in new public company that will be spun off to Danaher shareholders in a tax-free transaction. The spinoff will complete a shift under way at Danaher for the past few years to exit old-line manufacturing businesses or businesses with little in common.

Other diversified industrial companies that have sold or spun off major business lines to shareholders in recent years include Tyco International PLC., ITT Corp., Illinois Tool Works Inc., Johnson Controls Inc. and Ingersoll-Rand PLC.

While other conglomerates were pressured into realignments by activist investors or slumping profits, Danaher has been among the best-performing conglomerates year after the year. With a business-operating regimen focused on driving out costs and expanding margins, Danaher has a reputation for effectively steering through tough business conditions and quickly harvesting the benefits from business acquisitions.

The new company carved out of Danaher will consist of its testing and measurement equipment unit; the Gilbraco Veeder-Root fuel pumps business; automation gear and sensors; and Matco tools for mechanics. The businesses had combined revenue of about $6 billion in 2014. The company, which hasn't yet been named, will be headed by veteran Danaher executive James Lico, who is now executive vice president in charge of the testing and measurement business and fuel pump line. Danaher expects to complete the spinoff near the end of 2016.

Danaher's co-founders--Chairman Steven Rales and his brother Mitchell Rales, a Danaher director--will serve on the board of the new company. Meanwhile, Thomas Joyce will remain as CEO of Danaher, which is based in Washington, D.C.

"Danaher will be a more focused science and technology growth company, united by common business models and attractive characteristics," Mr. Joyce said during a conference call Wednesday with analysts. "Our large installed base of instruments is expected to generate a stable and sustainable revenue stream."

Going forward Danaher's portfolio will consist of its life sciences businesses; diagnostic tests, which includes Beckman Coulter, a medical-diagnostic-equipment maker; product identification gear; dental appliances; water treatment equipment; and Pall.

The businesses had combined revenue of $16.5 billion last year. More than two-thirds of the revenue came from replacement parts and sales of consumable items, such as testing kits made by Beckman Coulter. Mr. Joyce said Pall will be a good fit for the revamped lineup.

The Port Washington, N.Y.-based company sells purification and filtration equipment for water and other liquids to biopharmaceutical companies, airplane manufacturers, brewers and municipal water systems. About half of Pall's $2.8 billion of revenue last year came from its life sciences business where about 60% of the sales were derived from the biopharmaceutical industry, which produces drugs, vaccines and other treatments from biological sources, rather than chemicals.

Pall's industrial business unit generated $1.3 billion of revenue last year. Municipal water systems and other process industries accounted for about two-thirds of industrial's revenue.

Danaher will pay Pall shareholders $127.20 in cash for each of their shares, about a 28% premium over the closing price of Pall's stock on Monday. The purchase of Pall is Danaher's largest acquisition to date, surpassing the purchase of Beckman Coulter in 2011 for $5.9 billion.

As Danaher devoted more resources to large-size acquisitions of science and technology companies, Mr. Joyce said the industrial units have become increasingly deprived of investment. By launching these businesses into a separate company, Mr. Joyce predicted they will be better able to pursue acquisitions and raise capital.

"A focused, coherent straightforward structure [will] allow them to focus on their end-markets and have renewed license to do mergers and acquisitions," he said.

Danaher's stock was recently trading up 1.4% at $87.19.

Write to Bob Tita at robert.tita@wsj.com

Access Investor Kit for CCL Industries, Inc.

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=CA1249002009

Access Investor Kit for CCL Industries, Inc.

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=CA1249003098

Access Investor Kit for Ingersoll-Rand Plc

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=IE00B6330302

Access Investor Kit for Danaher Corp.

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=US2358511028

Access Investor Kit for ITT Corp.

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=US4509112011

Access Investor Kit for Illinois Tool Works, Inc.

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=US4523081093

Access Investor Kit for Johnson Controls, Inc.

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=US4783661071

Access Investor Kit for Pall Corp.

Visit http://www.companyspotlight.com/partner?cp_code=P479&isin=US6964293079

Stocks mentioned in the article
ChangeLast1st jan.
CCL INDUSTRIES INC. -1.36% 44.34 Delayed Quote.-14.41%
DANAHER CORPORATION -2.60% 152.695 Delayed Quote.2.18%
ILLINOIS TOOL WORKS INC. -2.04% 179.345 Delayed Quote.1.91%
INGERSOLL-RAND -1.79% 139.52 Delayed Quote.9.57%
ONE STOP SYSTEMS, INC. -7.39% 2.38 Delayed Quote.27.23%
PALL CORPORATION -0.01% 127.11 Delayed Quote.25.59%
share with twitter share with LinkedIn share with facebook
share via e-mail
Latest news "Forex"
02:08pFed banks unanimously voted to keep discount rate unchanged - minutes
02:03pJPMorgan executives say bank is big enough to weather any storm
02:02pJPMorgan Chase plans to unveil climate initiatives at investor day
01:55pJPMorgan Chase plans to unveil climate initiatives at investor day
01:55pMan Utd 'rebuild' as Champions League absence proves costly
01:54pCorrection to Home Price Growth Article
01:50pItaly's coronavirus outbreak spreads south, death toll rises
01:42pNTSB faults Tesla, U.S. regulators in deadly 2018 Autopilot crash
01:32pMallinckrodt agrees to $1.6 bln opioid settlement, unit to seek bankruptcy
Latest news "Forex"