This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Danaher Identifies Products It Wants in X-Rite Buy

NEW YORK ( TheStreet) -- Industrial conglomerate Danaher (DHR - Get Report) is buying X-Rite (XRIT) for $5.55 a share or an enterprise value of roughly $625 million.

Danaher is buying X-Rite at a near 40% premium to Monday's closing price and will take in a specialty operation that has returned to profitability after reducing a heavy debt burden that weighed on earnings. With X-Rite, Danaher will get the company's Pantone brand, a leading manufacturer color systems that are key for printing companies, graphic designers, and photographers.

"We are excited about the opportunity to acquire two premier brands in X-Rite and Pantone," said William K. Daniel, executive v.p. of Danaher." If the deal closes, which Danaher expects to happen in the second quarter, X-Rite will operate as a stand-alone company within Danaher's product identification group and will retain its brands. The acquisition should also benefit Danaher's digital packaging unit, Esko.

"Along with Videojet and Esko, we believe X-Rite and Pantone will further Danaher's leading position in the product identification industry and present an attractive value creation opportunity."

The cash offer is subject to a tender offer, which Danaher said that 68% of X-Rite shareholders have already agreed to. According to Bloomberg compilations of Securities and Exchange Commission filings, X-Rite's largest shareholders are JPMorgan with a 39% stake and Sagard Capital with 15% of X-Rite's outstanding shares.

X-Rite shares rose nearly 40% in pre-market trading to $5.59, slightly above Danaher's offer price. Prior to Tuesday's deal the company's shares dropped nearly 14% year-to-date. Danaher shares were little changed at $54.59.

Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

In 2011, Grand Rapids, MI-based X-Rite reported a record profit of nearly $50 million on growing revenues and a drop in interest expense. Since 2009, the company has pared a debt burden of $270 million down to roughly $150 million, helping the company to turn successive profitable years after a string of losses, which peaked at nearly $120 million in 2009.

With X-Rite, Danaher will add $237 million in annual revenue to its industrial technologies unit that generated over $3 billion in sales or nearly 20% of its overall revenue.

In March, Bloomberg reported that Danaher and Cooper Industries (CBE) are looking to sell a joint venture that makes hand tools for Sears Holdings (SHLD) Craftsman brand. The venture, called Apex Tool Group, could be sold for $1.5 billion or more, according to Bloomberg reports citing unnamed sources.

For more on industrial M&A, see why a Thomas Bett's acquisition by ABB could spark deal making

-- Written by Antoine Gara in New York

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
DHR $86.28 0.00%
AAPL $112.34 0.00%
FB $89.89 0.00%
GOOG $614.34 0.00%
TSLA $247.69 0.00%

Markets

Chart of I:DJI
DOW 16,351.38 +293.03 1.82%
S&P 500 1,948.86 +35.01 1.83%
NASDAQ 4,749.9790 +113.8740 2.46%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs