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Danaher Closes Buyout of General Electric's BioPharma Business
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Danaher Corporation (DHR - Free Report) yesterday announced that it completed the acquisition of General Electric Company’s (GE - Free Report) BioPharma business. Notably, the buyout deal was revealed in February 2019 by the parties involved.
The BioPharma business originally belonged to General Electric’s GE Life Sciences business under the ambit of the Healthcare segment. The BioPharma business comprises single-use technologies, process chromatography hardware and related consumables, development instrumentation and related consumables, and cell culture media and service.
Inside the Headlines
For the completion of the transaction, Danaher secured approvals from various regulatory authorities, including the European Commission as well as the antitrust authorities of Korea, Brazil, Russia, China, Israel and Japan. Also, the U.S. Federal Trade Commission gave a green signal to the buyout on Mar 19.
Danaher used cash on hand, proceeds from shares and preferred stock issuances, and funds raised through debts and credit facilities to pay $21 billion for the buyout. The company also assumed certain pension liabilities of General Electric. The total transaction value for the buyout was $21.4 billion.
The acquired BioPharma business will be included in Danaher’s Life Sciences segment. It will be called Cytiva and work as an operating company (stand-alone).
Danaher anticipates the acquisition to strengthen its biologics workflow solutions. Earnings accretion of 60 cents per share is anticipated in 2020 (disclosed in January 2020) from the buyout. Previously, the company had expected 45-50 cents per share earnings accretion for the first year of the deal completion.
Danaher’s Acquisitions
We believe that the above-mentioned transaction is consistent with the company’s policy of acquiring businesses to gain access to new customers, regions and product lines. In 2019, it used $331.3 million for making acquisitions.
Danaher acquired Labcyte Corporation in January 2019. The buyout of Labcyte has been fortifying Danaher’s automation capabilities.
Zacks Rank, Price Performance and Estimate Trend
With a market capitalization of $98.1 billion, Danaher currently carries a Zacks Rank #3 (Hold). The company is poised to benefit from product innovation, Danaher Business System, shareholder-friendly policies and inorganic initiatives. However, forex woes, high costs and huge debts remain concerning.
The company’s share price has decreased 10.7% in the past three months compared with the 26.5% fall recorded by the industry.
In the past 60 days, the Zacks Consensus Estimate for its earnings has been lowered by 1.3% to $5.38 for 2020 and 0.8% to $6.17 for 2021. Notably, there were three downward revisions for both years in the past 60 days.
In the past 60 days, earnings estimates for Hitachi have improved for the current year, while have been unchanged for Griffon.
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Danaher Closes Buyout of General Electric's BioPharma Business
Danaher Corporation (DHR - Free Report) yesterday announced that it completed the acquisition of General Electric Company’s (GE - Free Report) BioPharma business. Notably, the buyout deal was revealed in February 2019 by the parties involved.
The BioPharma business originally belonged to General Electric’s GE Life Sciences business under the ambit of the Healthcare segment. The BioPharma business comprises single-use technologies, process chromatography hardware and related consumables, development instrumentation and related consumables, and cell culture media and service.
Inside the Headlines
For the completion of the transaction, Danaher secured approvals from various regulatory authorities, including the European Commission as well as the antitrust authorities of Korea, Brazil, Russia, China, Israel and Japan. Also, the U.S. Federal Trade Commission gave a green signal to the buyout on Mar 19.
Danaher used cash on hand, proceeds from shares and preferred stock issuances, and funds raised through debts and credit facilities to pay $21 billion for the buyout. The company also assumed certain pension liabilities of General Electric. The total transaction value for the buyout was $21.4 billion.
The acquired BioPharma business will be included in Danaher’s Life Sciences segment. It will be called Cytiva and work as an operating company (stand-alone).
Danaher anticipates the acquisition to strengthen its biologics workflow solutions. Earnings accretion of 60 cents per share is anticipated in 2020 (disclosed in January 2020) from the buyout. Previously, the company had expected 45-50 cents per share earnings accretion for the first year of the deal completion.
Danaher’s Acquisitions
We believe that the above-mentioned transaction is consistent with the company’s policy of acquiring businesses to gain access to new customers, regions and product lines. In 2019, it used $331.3 million for making acquisitions.
Danaher acquired Labcyte Corporation in January 2019. The buyout of Labcyte has been fortifying Danaher’s automation capabilities.
Zacks Rank, Price Performance and Estimate Trend
With a market capitalization of $98.1 billion, Danaher currently carries a Zacks Rank #3 (Hold). The company is poised to benefit from product innovation, Danaher Business System, shareholder-friendly policies and inorganic initiatives. However, forex woes, high costs and huge debts remain concerning.
The company’s share price has decreased 10.7% in the past three months compared with the 26.5% fall recorded by the industry.
In the past 60 days, the Zacks Consensus Estimate for its earnings has been lowered by 1.3% to $5.38 for 2020 and 0.8% to $6.17 for 2021. Notably, there were three downward revisions for both years in the past 60 days.
Danaher Corporation Price and Consensus
Danaher Corporation price-consensus-chart | Danaher Corporation Quote
Stocks to Consider
Two better-ranked stocks in the industry are Griffon Corporation (GFF - Free Report) and Hitachi Ltd. (HTHIY - Free Report) . While Hitachi sports a Zacks Rank #1 (Strong Buy), Griffon carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the past 60 days, earnings estimates for Hitachi have improved for the current year, while have been unchanged for Griffon.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.
This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
See their latest picks free >>