Danaher Corp to acquire Pall in $13.8bn deal


Financier Worldwide Magazine

July 2015 Issue

July 2015 Issue

US based multinational Danaher Corporation announced in May that it had agreed to acquire Pall Corporation in a deal worth approximately $13.8bn.

According to a statement released by the firm, Danaher will acquire all of the outstanding shares of Pall for $127.20 per share. The transaction will be an all cash deal for a total enterprise value of approximately $13.8bn, including the assumption of Pall’s existing debt. The agreed price represents a 29 percent premium to Pall’s closing price on Monday 11 May, the last day of trading before media speculation concerning a potential deal began. The companies expect the deal to be completed by the end of 2015, subject to customary closing conditions, and provided the transaction wins the approval of Pall’s shareholders. The newly combined firm will have revenues of around $16.5bn.

Danaher has announced that it will finance the deal with around $3bn of available cash and $5bn in new debt. Danaher is paying approximately 18 times earnings before interest, taxes, depreciation and amortisation (EBITDA) for Pall; the historical average for deals concerning similar companies is around 15 times EBITDA. Over the course of the next five years, Danaher expects to save as much as $300m in synergies, although some analysts believe that the company will struggle to meet its goals.

Danaher’s president and chief executive, Thomas Joyce, Jr., said “Pall is a highly attractive business, with approximately 75 percent recurring revenues, mid-single digit organic growth and a solid margin profile. Its best-in-class technology, combined with the broadest, most technically-advanced solutions, make it the premier brand in the filtration industry. Pall will provide us a leading business with significant runway for expansion and strengthens our life sciences position in the strategically-attractive, high-growth biopharmaceutical market. With the Danaher Business System as a foundation, Pall associates will have the tools to accelerate new product development and improve operational efficiency in the years to come. We look forward to welcoming the Pall team to Danaher.”

Once the transaction has closed, Danaher will split its business into two separate publically traded companies, the company confirmed in a separate statement. The divide will see Danaher split into a science and technology company and an industrial company through a tax-free separation which is expected to be completed by the end of 2016. The company retaining the Danaher name will comprise Pall Corp as well as Danaher’s life sciences and diagnostics, dental, water quality and product identification businesses. According to Danaher the other business will primarily manufacture test and measurement products, retail fuel pumps, and telematics and automation products.

Danaher is believed to have beaten competition from a number of rivals, including Thermo Fisher Scientific Inc., in order to secure the deal for Pall. Indeed, the purchase of Pall is the latest in a string of consolidations within the life sciences space over the last two or so years. Notable deals in the industry have included Thermo Fisher’s $15.8bn acquisition of Life Technologies and Merck KGaA’s $17bn deal for Sigma-Aldrich.


Larry Kingsley, Chairman and Chief Executive Officer of Pall Corporation said “This transaction delivers substantial value to our shareholders and creates an incredible opportunity for long-term growth that will benefit all of our stakeholders. Pall is a complementary fit for Danaher, with Danaher’s proven management system and strong financial position coupled with Pall’s expertise, brand and channel strength in the field of filtration and separation science enabling the creation of tremendous value for the global customers of the combined company. Our employees will benefit by being associated with a world-class company that has the capability to further enhance Pall’s market position.”

Mr Joyce will be the chief executive of the new Danaher once the split has occurred. James Lico, who leads Danaher’s retail fuel and test and measurement businesses, will serve as chief executive of the diversified industrial company.

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Richard Summerfield

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