Danaher, of Washington, said it agreed to offer $53.00 a share for Sunnyvale, Calif.-based Cepheid, or almost 54% more than the target's Friday closing price of $34.42.
The purchase comes two months after Danaher, a one-time real estate investment trust-turned conglomerate, completed the spinoff of industrial technology and testing group Fortive (FTV) .
"We expect Cepheid to be an excellent complement to our existing Diagnostics businesses and to expand our runway for growth across the platform," said Danaher president and CEO Thomas P. Joyce Jr. in a statement. "Cepheid's extensive installed base, test menu and innovative product offering contribute to its market leadership in molecular diagnostics and we expect it to strengthen our position in this high-growth segment."
Danaher said the purchase will dilute GAAP diluted net earnings per share slightly in the first full-year but boost them on a non-GAAP basis by 5 cents, rising to 30 cents by year five.
Danaher expects to finance the transaction with available cash and new debt.
Its shares closed down 25 cents on Friday at $81.19. The company has a market value of $56 billion.
Cepheid shares closed up 16 cents at $34.42.
Cepheid had sales of $539 million in 2015, and expects revenue of between $618 million and $635 million this year. It will join Beckman Coulter, Leica Biosystems and radiometer businesses in Danaher's $5 billion diagnostics division.
TheStreet.com's sister publication, The Deal, had in April named Cepheid as a likely M&A target. Its stock has fallen 30% in the past year.