Danaher Corp, one of the world’s largest suppliers of medical and diagnostic tools, has announced its plans to acquire protein consumables manufacturer Abcam Plc in a $5.7 billion deal. The acquisition will be an all-cash transaction, including debt.
The primary objective behind this acquisition is to broaden Danaher’s portfolio of products and services. By expanding their offerings, the company aims to counteract the sluggish demand they have been experiencing for their products from smaller biotech firms.
Notably, Danaher has been revising its annual sales growth forecast multiple times this year due to these slow market conditions. The purchase of Abcam is expected to provide a major boost to the company’s prospects, as it will allow Danaher to tap into Abcam’s expertise in manufacturing and supplying protein consumables used in medical research, such as antibodies and reagents.
Experts believe that incorporating Abcam’s higher-margin business into Danaher’s operations will prove beneficial in the long run. Abcam had engaged with 20 potential buyers before ultimately settling on Danaher as the ideal partner for this deal.
The acquisition is scheduled to conclude in mid-2024 and is projected to contribute to Danaher’s adjusted earnings per share by 20 cents in the first full year after its completion. In terms of the financial arrangements, Danaher has offered $24 per share in cash, representing a 2.7% premium to Abcam’s last closing price.
Following the announcement, Abcam’s shares experienced a slight decline of about 3.1%, whereas Danaher’s shares rose by 1.8%. This acquisition is part of Danaher’s overarching strategy to enhance its market presence through strategic acquisitions. It follows previous purchases of Aldevron and General Electric Co’s biopharma solution business.
By expanding its product portfolio and solidifying its position within the medical and diagnostic tools sector, Danaher is positioning itself for continued success and growth in the years to come.
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