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NEW YORK (TheStreet) -- Shares of Pall Corp. (PLL) - Get Free Report are gaining by 5.16% to $124.74 in pre-market trading on Wednesday morning, after the water filtration systems maker announced that it has agreed to be acquired by Danaher Corp. (DHR) - Get Free Report for $127.20 per share, or $13.8 billion, including assumed debt.

The company said the deal is expected to close sometime in calendar 2015.

"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 CEO Larry Kingsley said in a statement announcing the buyout.

"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," Kingsley added.

The company said the consideration represents approximately a 28% premium to Pall's common stock over the closing price of $99.31 on May 11, 2015, the day before initial media speculation around the possibility of a deal.

Separately, TheStreet Ratings team rates PALL CORP as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:

"We rate PALL CORP (PLL) a BUY. This is driven by a few notable strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its increase in net income, largely solid financial position with reasonable debt levels by most measures, notable return on equity, expanding profit margins and good cash flow from operations. We feel its strengths outweigh the fact that the company is trading at a premium valuation based on our review of its current price compared to such things as earnings and book value."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and the Machinery industry average. The net income increased by 0.9% when compared to the same quarter one year prior, going from $83.67 million to $84.40 million.
  • The debt-to-equity ratio is somewhat low, currently at 0.76, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.20, which illustrates the ability to avoid short-term cash problems.
  • Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. When compared to other companies in the Machinery industry and the overall market, PALL CORP's return on equity exceeds that of the industry average and significantly exceeds that of the S&P 500.
  • The gross profit margin for PALL CORP is rather high; currently it is at 55.00%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 12.52% is above that of the industry average.
  • Net operating cash flow has slightly increased to $123.63 million or 3.28% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -32.24%.
  • You can view the full analysis from the report here: PLL Ratings Report