Danaher Expands in Life Sciences

Earlier today, Danaher Corp. (DHR - Analyst Report) announced its decision to acquire the Analytical Technologies division of MDS Inc. (MDZ). This includes a 50% stake in Applied Biosystems/MDS Sciex joint venture (AB SCIEX), and a 100% ownership in the former Molecular Devices Corp. The company has also reached an agreement with Life Technologies Corp. (LIFE - Analyst Report) to acquire the remaining 50% ownership position in AB SCIEX.
 
AB SCIEX designs and manufactures mass spectrometers, highly sensitive and sophisticated instruments used by researchers and clinicians. It sells its products to academic and research institutions, pharmaceutical development labs primarily supporting clinical trials, testing and reference labs and hospitals. Molecular Devices is a bioresearch and analytical instrumentation company. Danaher will pay a total of $1.1 billion for a full ownership of both these businesses.
 
The acquired businesses will be added to the company’s Medical Technologies segment, which represented approximately 27% of Danaher’s total revenues in the first half. These businesses are expected to add more than $650 million to the segment’s annual revenues. With the completion of this acquisition, the company will be able to generate more than $2 billion in annual revenues from life sciences and diagnostics.
 
In a separate announcement, Danaher said that it will accelerate its restructuring activities during this year. The company plans to close down 30 facilities and eliminate 3,300 positions. These actions are expected to result in annual cost savings of approximately $220 million. The company expects to benefit from these activities in 2010 and beyond.
 
Danaher is positioning itself to capitalize on the expected market recovery through aggressive cost reduction measures, market share gains, and growth through acquisitions. The company managed to grab market share from its competitors in a number of businesses during the second quarter.
 
Danaher is confident of its ability to invest in growth through acquisitions in the current market. The company had $1.3 billion in cash and cash equivalents at the end of the second quarter.

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