Danaher Grabs Pall for $13.8B and Plans to Split Merged Company

NEW YORK (The Deal) -- Danaher (DHR) said Wednesday it would acquire Pall (PLL), which makes water-filtration products, for $13.8 billion in cash and debt and then split the merged entity into two independent companies.

Terms of the deal call for Washington-based Danaher to pay $127.20 per share in cash for Pall, a premium of 7.2% to the target's close. Danaher said that after the merger closes, it will separate into a science and technology company, which would include the Pall assets, and an industrials firm, which would take a new name.

Port Washington, N.Y.-based Pall is a maker of filtration, separation and purification products, generating $2.8 billion in annual sales from the life sciences and industrials markets. The company's $1.5 billion life sciences segment serves pharmaceuticals, food and beverage, and medical end markets, while the industrials segment caters to aerospace and electronics among other uses.

TheStreet's Trifecta Stocks model portfolio holds shares of Danaher, and managers Bryan Ashenberg and Bob Lang expect the stock to rise on the acquisition news.  

Danaher CEO Thomas P. Joyce Jr. said in a statement that Pall is "the premier brand in the filtration industry," with strong margins and reliable organic growth. The company expects Pall to contribute about 40 cents per share to non-GAAP 2016 earnings per share.

"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," Joyce said.

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