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Danaher to Soon Close BioPharma Buyout, Receives FTC Approval
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Danaher Corporation (DHR - Free Report) is in the final stages of completing the acquisition of General Electric Company’s (GE - Free Report) BioPharma business. Yesterday, the conglomerate received a green signal from the U.S. Federal Trade Commission (“FTC”). With this, it completed all requirements for getting antitrust clearances for the buyout.
Notably, Danaher announced the buyout deal in February 2019.
The BioPharma business is part of General Electric’s GE Life Sciences business, which, in turn, is part of the Healthcare segment. The BioPharma business comprises single-use technologies, process chromatography hardware and related consumables, development instrumentation and related consumables, cell culture media and service.
Inside the Headlines
Danaher also noted that the buyout received clearances from the European Commission as well as antitrust authorities of Korea, Brazil, Russia, China, Israel and Japan.
The transaction is anticipated to close on Mar 31, after the fulfillment of conditions mentioned in the purchase agreement.
The buyout has been valued at $21.4 billion. Of the total amount, Danaher will pay roughly $21 billion through cash on hand, funds raised through debts and credit facilities, and proceeds from shares and preferred stock issuances. Also, it will assume certain pension liabilities of General Electric.
Post the completion of the buyout, Danaher will integrate the BioPharma business with its Life Sciences segment. The acquisition is anticipated to strengthen Danaher’s biologics workflow solutions. Earnings accretion of 60 cents per share is anticipated in 2020 (disclosed in January 2020) from the buyout. Previously, Danaher had expected 45-50 cents per share earnings accretion in 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 $89.2 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 19% in the past three months compared with the 32.7% fall recorded by the industry.
In the past 30 days, the Zacks Consensus Estimate for its earnings has been lowered by 2.2% to $5.42 for 2020 and 1.1% to $6.21 for 2021.
In the past 30 days, earnings estimates for Griffon have improved for the current year, while have been unchanged for Hitachi.
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Danaher to Soon Close BioPharma Buyout, Receives FTC Approval
Danaher Corporation (DHR - Free Report) is in the final stages of completing the acquisition of General Electric Company’s (GE - Free Report) BioPharma business. Yesterday, the conglomerate received a green signal from the U.S. Federal Trade Commission (“FTC”). With this, it completed all requirements for getting antitrust clearances for the buyout.
Notably, Danaher announced the buyout deal in February 2019.
The BioPharma business is part of General Electric’s GE Life Sciences business, which, in turn, is part of the Healthcare segment. The BioPharma business comprises single-use technologies, process chromatography hardware and related consumables, development instrumentation and related consumables, cell culture media and service.
Inside the Headlines
Danaher also noted that the buyout received clearances from the European Commission as well as antitrust authorities of Korea, Brazil, Russia, China, Israel and Japan.
The transaction is anticipated to close on Mar 31, after the fulfillment of conditions mentioned in the purchase agreement.
The buyout has been valued at $21.4 billion. Of the total amount, Danaher will pay roughly $21 billion through cash on hand, funds raised through debts and credit facilities, and proceeds from shares and preferred stock issuances. Also, it will assume certain pension liabilities of General Electric.
Post the completion of the buyout, Danaher will integrate the BioPharma business with its Life Sciences segment. The acquisition is anticipated to strengthen Danaher’s biologics workflow solutions. Earnings accretion of 60 cents per share is anticipated in 2020 (disclosed in January 2020) from the buyout. Previously, Danaher had expected 45-50 cents per share earnings accretion in 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 $89.2 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 19% in the past three months compared with the 32.7% fall recorded by the industry.
In the past 30 days, the Zacks Consensus Estimate for its earnings has been lowered by 2.2% to $5.42 for 2020 and 1.1% to $6.21 for 2021.
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) . Both stocks currently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
In the past 30 days, earnings estimates for Griffon have improved for the current year, while have been unchanged for Hitachi.
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 >>