Danaher Buys Radiometer, Gendex
Dec 12, 2003
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Diversified manufacturer Danaher Corp. jumped aggressively into the medical equipment sector on Dec. 11 with the announcement that it plans to spend more than U.S. $830 million to acquire two companies.

Danaher said it would buy Copenhagen-based Radiometer A/S for Dkr4.4 billion ($730 million) and the Gendex (Des Plaines, IL, U.S.) dental equipment business from York, PA, U.S.-based Dentsply International Inc. for $102.5 million.

Radiometer is a maker of blood gas analyzers. DH Denmark Holdings ApS, a newly formed Danaher subsidiary, has agreed to pay Dkr460 per share for Radiometer, a premium of 6 percent more than the target’s Wednesday closing price on the Copenhagen stock exchange and 15.4 percent on the company’s 6-month average share price.

In a statement Danaher president and CEO H. Lawrence Culp Jr. said the company would seek to bolster its medical technologies offerings through further acquisitions and organic growth. "We have viewed medical technology as an attractive and complementary expansion opportunity for a number of years," he said.

Radiometer was put on the block earlier this year in response to the considerable consolidation and rapid technological advances in the medical technology sector. The company’s board said that to compete the company needed greater access to capital and more money and expertise for acquisitions.

Though Carnegie contacted numerous potential suitors, several declined to bid. Analysts said the lack of bidders for Radiometer was due in part to concerns that Radiometer’s main rivals would have faced antitrust issues in a deal.

Radiometer has 22 percent of the global market for blood gas analyzer products, followed by Bayer AG’s diagnostics division with 18 percent, and Swiss Roche’s diagnostics division with 12 percent.

Neils Lett, an analyst with Endkilda Securities, said Radiometer was being acquired at about a 20 percent discount to the last major deal in the sector, General Electric Co.’s $2.3 billion takeover of Finland’s Instrumentarium Corp. in September. Lett called the discount fair in view of Instrumentarium’s much more significant market presence, adding that a takeover price was already built into Radiometer’s stock.

"People were aware it was for sale, and shares have been trading at a premium," Mr. Lett said. (The Deal.com)

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