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Danaher to Lower Stake in Envista, Finalizes Exchange Ratio

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Danaher Corporation (DHR - Free Report) recently announced the exchange ratio for its previously announced offer, designed to allow its stock holders to exchange shares of Danaher common stock for shares of Envista Holdings Corporation (NVST - Free Report) common stock.

Notably, Danaher completed the divestment and transfer of its dental assets to its subsidiary, Envista, in September 2019. The final calculated per-share value of Danaher common stock and Envista common stock, determined per the exchange offer prospectus would have led to an exchange ratio in excess of the upper limit of 5.5784. As noted by Danaher, the exchange ratio finalized for one share of Danaher common stock has been fixed at 5.5784 shares of Envista common stock.

Applying the exchange ratio, Danaher is likely to accept 22,921,984 shares of its common stock for exchange with Envista’s shares. It’s worth mentioning here that the company expects the exchange offer to close at 12:00 midnight, New York City time, on Dec 13, 2019.

Existing Business Scenario

Danaher believes that solid demand for innovative products, effective implementation of Danaher Business System and shareholder-friendly policies will boost its profitability in the upcoming quarters. Also, it anticipates the buyout of the BioPharma business to complement its Life Sciences segment. For fourth-quarter 2019, the company expects adjusted earnings of $1.32-$1.35 and core sales growth of 4.5%.

However, rising cost of sales has been a major cause of concern for Danaher. For instance, the company's cost of sales jumped 4.6% year over year in the first three quarters of 2019. Also, in the same period, its selling, general and administrative expenses increased 4.4%.

In the past six months, this Zacks Rank #3 (Hold) stock has returned 7.9% compared with 5.5% growth recorded by the industry.

Stocks to Consider

A couple of better-ranked stocks from the same space are Macquarie Infrastructure Company and ITT Inc. (ITT - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Macquarie surpassed estimates twice in the trailing four quarters, the average positive earnings surprise being 5.34%.

ITT outpaced estimates in each of the preceding four quarters, the average positive earnings surprise being 7.85%.

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Danaher Corporation (DHR) - free report >>

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Envista Holdings Corporation (NVST) - free report >>

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