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Danaher's Stock Offering Proceeds to Fund Corporate Needs

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Danaher Corporation (DHR - Free Report) on May 12 announced the completion of offerings of common shares and 5.00% Series B mandatory convertible preferred stock. Notably, the public offerings were announced on May 7, 2020.

It is worth mentioning here that the company’s shares declined 0.24% yesterday, ending the trading session at $159.89.

Inside the Headlines

As disclosed, it priced each common share for $163.00 and each 5.00% Series B mandatory convertible preferred stock for $1,000. The company sold as many as 9.5 million common shares and 1.72 million preferred stocks (including 0.17 million preferred stocks sold to underwriters).

In addition, the company noted that underwriters of common stock offerings have exercised their option to purchase extra 1.4 million shares on May 12. The procedure, with anticipated net proceeds of $225.5 million, will be completed on May 14.

Danaher received net proceeds of $1.50 billion from the common stock offering, while got $1.67 billion from preferred stock offering. Notably, the net proceeds from preferred stock offerings were after including the impacts of underwriter option and deducting for discounts and issuance costs.

The company anticipates using the net proceeds for satisfying general corporate purposes — including capital expenditures, buyouts, working capital needs, shares repurchases, refinancing of debts, dividends and others.

It is worth mentioning here that Danaher’s shares outstanding at the end of first-quarter 2020 were 707.9 million. We believe that the above-mentioned common stock offering along with preferred stocks, when converted into common stock, will increase the company’s common stock outstanding balance.

Rise in shares outstanding will likely have adverse impacts on the company’s earnings per share.

Zacks Rank, Price Performance, Estimate Trend and Competitors

With a market capitalization of $111.8 billion, Danaher currently carries a Zacks Rank #3 (Hold). It expects to gain from Danaher Business System (“DBS”), shareholder-friendly policies and inorganic activities, going forward. However, the company’s businesses in Western Europe and North America will be hit badly (sequentially) by the pandemic. Also, high debt levels, forex woes, and rise in costs and expenses might be dragging.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

In the past 30 days, the Zacks Consensus Estimate for its earnings has declined 2.6% to $4.88 for 2020 and 1.9% to $5.73 for 2021.

Danaher Corporation Price and Consensus

 

Danaher Corporation Price and Consensus

Danaher Corporation price-consensus-chart | Danaher Corporation Quote

The company’s share price has decreased 3.7% in the past three months compared with the industry’s decline of 28.3%. Its performance is better than that of three competitors, General Electric Company (GE - Free Report) , 3M Company (MMM - Free Report) and Xylem Inc. (XYL - Free Report) , with declines of 54.9%, 15.5% and 34% respectively, in the past three months.
 

 

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