Danaher-Beckman Coulter Deal: ‘More than Fair’

| February 7, 2011

Danaher also owns Leica and SlidePath

Danaher agreed to buy lab-equipment maker Beckman Coulter for $5.87 billion.

Danaher’s deal is valued at $83.50 a share in cash, which the companies said was 45% more than the price of Beckman Coulter shares before The Wall Street Journal and others reported in December that the company was on the auction block. At the time, Danaher was among the companies expected to take a run at Beckman Coulter.

Beckman Coluter’s stock price is pointing up about 10% in pre-market trading, to $82.62. Danaher shares also are trending up – unusual for acquiring companies when they announce deals.

Here is a look at Wall Street’s first read on the deal:

“While our analysis of strategic buyers suggested that a deal could be done hypothetically at a higher price per share, we felt there were very fewer bidders who could go materially higher than $80 per share without incorporating an equity component and/or risking changes to their credit rating. Thus, we feel that a sale price in the low $80s is more than fair.” –- Cowen & Co.

Given prior speculation about the deal in the press…we think another party coming in over the top at this point is highly unlikely. Valuation looks fair based on prior transactions. The announced $83.50 price represents 11x EV/(EBITDA-lease capex) on a trailing basis. –- J.P. Morgan

“We view DHR’s proposed acquisition of BEC for $83.50/share [~8x 2010e EBITDA (ex options) and ~10% premium to the 2/4 close] as a positive for DHR. We believe the probability that this deal closes is very high. The bidding process was comprehensive and competitive, and thus we view a higher competing bid as unlikely.” –-Leerink Swann

Courtesy of Wall Street Journal

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Category: Pathology News

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