Cart (0)
business newsBeckman Coulter's Surprise Buyer
By
Brett Chase
Feb 08, 2011 2:15 pm
Private equity bidders knew they'd face competition, but the new Danaher deal exposes the depth of potential suitors.
PRINT
 |
|
The trouble is strategic buyers are also looking for deals. And while the buyout firms circling Beckman knew they’d be up against some deep-pocket rival bidders, sometimes the winning buyer will surprise you.
Enter Danaher (DHR), a conglomerate of some size ($33 billion market cap) but hardly General Electric (GE), which has a sizable medical business. Danaher makes a mix of unrelated products, including water treatment systems, dental products and Craftsman tools for Sears (SHLD).
If it completes its $6.8 billion takeover for Beckman, Danaher says medical products will account for almost half of its sales. (The value of the cash deal included Beckman’s debt.)
The $83.50 a share offer is rich, representing a 45% premium over Beckman shares just before word of a possible auction leaked out in December. That price probably discourages private equity buyers from counter bidding, according to some analysts.
At least four private equity firms were interested in Beckman, according to reports. Blackstone Group (BX) and TPG Capital made up one bidding group and Apollo Management and Carlyle Group formed another, Reuters reports.
“We do not know whether any of these parties will counter the Danaher bid, but given the premium as well as the amount of time to conduct due diligence and submit bids, we think the Danaher offer will likely stick,” RBC Capital Markets analyst Bill Bonello says.
Beckman Coulter sells laboratory instruments, software and supplies. Its diagnostics systems are used in hospitals and doctors’ offices. Regulatory issues led to Beckman CEO Scott Garrett’s resignation in September. The troubled company began looking for a buyer a couple of months ago.
What’s interesting about this deal is that Danaher’s stock didn’t get punished despite the big price. The deal will be funded by a combination of cash on hand and debt, the company says. Danaher’s stock climbed 4% over two days, trading at $49.92 midday Tuesday.
Health care will continue to lure private equity but these firms have added competition from strategic buyers (and not just the obvious ones). If that results in 45% premiums in takeovers, all the better for investors.
No positions in stocks mentioned.
The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.
