Danaher Agrees To Buy Beckman Coulter For $5.87B
NEW YORK (AP) - Medical and industrial instruments maker Danaher Corp. said Monday it agreed to buy medical testing instrument maker Beckman Coulter for about $5.87 billion.
Beckman Coulter Inc. makes products that simplify and automate biomedical testing. It will become part of Danaher's life sciences and diagnostics business if the deal goes through. That would more than double the life science unit's revenue, making make it Danaher's largest business.
Beckman Coulter, which is based in Brea, Calif., had reportedly put itself up for sale in December.
Danaher has agreed to pay $83.50 per Beckman Coulter share, a 45 percent premium over Beckman's share price on Dec. 9 - the day before the acquisition rumors first surfaced. Danaher valued the purchase at $6.8 billion including Beckman Coulter's debt and its cash on hand.
The deal is expected to be completed in the first half of the year. Closing depends on a majority of Beckman Coulter shareholders tendering their shares in favor of the deal. Beckman Coulter said its board unanimously supports the sale.
Shares of Beckman Coulter surged $7.35, or 9.8 percent, to $82.52 in afternoon trading. Shares of companies making large acquisitions often trade lower, but Danaher shares rose $1.35, or 2.8 percent, to $49.33, an early indication that investors approve of the combination.
In a note to clients, Citi Investment Research analyst Deane Dray said Danaher is paying a reasonable price for Beckman Coulter, which is a "nice fit" with the rest of its business and should add to its profit immediately, excluding acquisition costs.
Danaher, which is based in Washington, D.C., reported $13.2 billion in revenue in 2010, with $2.3 billion from the life sciences business. It also makes Craftsman tools for the retailer Sears.
Beckman Coulter has not reported its full-year results, but it had $2.68 billion in revenue in the first nine months of the year.
Beckman Coulter has dealt with several recent setbacks. The company said in March it would have to get new regulatory approval for its AccuTnI test kit, which is used to determine if a patient has suffered a heart attack. The Food and Drug Administration said it appeared the company made changes to the test kits without approval. It reported a drop in its second-quarter profit and cut its annual guidance because sales from developed markets were down. Chairman, CEO and President Scott Garrett resigned unexpectedly in September after five years with the company.
In December, Beckman Coulter was linked to potential acquirers including Blackstone Group LP and Apollo Global Management LLC.
The company's shares have traded between $43.95 and $78.27 in the last year.