Danaher

$3 Billion ($11B total)

KEY EXECUTIVES:

Steven M. Rales, Chairman
H. Lawrence Culp, Jr., President and CEO
Daniel L. Comas, Exec. VP and CFO
Jonathan P. Graham, Sr. VP—General Counsel
Frances B. L. Zee, VP—Regulatory Affairs/Quality Assurance
Daniel A. Raskas, VP—Corp. Development

NO. OF EMPLOYEES:

50,000
   

GLOBAL HEADQUARTERS:

Washington, DC

As an industrial company immersed in diverse markets, Danaher’s name is rooted in the Celtic word  “Dana,” a term dating from before 700 BC that means “swift flowing.” Thus, it is fitting that the manufacturer was formed in the 1980s during a fishing trip on a river in western Montana bearing its namesake. In accordance with its concept of flow, Danaher has branded itself as a business focused on continuous improvement and customer satisfaction. And as a result, it has evolved in a multibillion-dollar, global enterprise in a relatively short period, operating more than 200 manufacturing facilities in more than 20 countries (with sales within more than 125 countries).

The proof of success is most evident in net sales figures, which totaled $11 billion for 2007. This amount marks 16.5% growth from nearly $9.5 billion recorded in 2006 and 40% growth compared with nearly $7.9 billion reported in 2005. Furthermore, free cash flow exceeded $1.5 billion and net earnings for 2007 were $1.2 billion.

Danaher categorizes its sales according to four major business segments, including Professional Instrumentation, which encompasses environmental and test and measurement products and services; Industrial Technologies, which accounts for products for motion and product identification; Tools and Components, which offers mechanical hand tools and products; and Medical Technologies, which consists of businesses that offer products and services to dentists, other doctors, hospitals and research professionals in the life sciences sector.

The latter segment, Medical Technologies, was a newer entrant into Danaher’s portfolio after the company acquired Kaltenback & Voigt GmbH & Co. KG (KaVo), the Gendex business of Dentsply International Inc. and Radiometer A/S in 2004. The company has continued to strengthen this division’s offerings through the acquisitions of Leica Microsystems in 2005 and Sybron Dental Specialties and Vision Systems Ltd. in 2006. Medical Technologies serves three main markets: dental products ($1.7 billion), acute care diagnostics ($400 million) and life sciences ($900 million). Total net sales for this segment in 2007 were $2.998 billion, a 35% increase from 2006 annual sales and 154% growth from 2005.

In just a few short years, Medical Technologies clearly has become a strong contributor to overall sales, given that Professional Instrumentation, Industrial Technologies, and Tools and Components reported 2007 sales of $3.5 billion, $3.2 billion and $1.3 billion, respectively, and Medical Technologies’ sales contributed 27% of the company’s total revenues in 2007.

More than half of Danaher’s total sales come from outside the United States, and this applies to the Medical Technologies segment as well. Last year, 37% of sales came from North America, 41% from Europe, 14% from Asia and other regions accounted for the remaining portion.

Looking specifically at some of the businesses within the Medical Technologies segment, much of the growth for the overall segment came from a mid-teens increase for Leica Microsystems, driven by microscopy demand. Leica, whose operations are in Europe, Australia, Asia and the United States, is a provider of high-precision optical instruments and other products for life-sciences and medical applications such as laboratory and surgical microscopes as well as diagnostics products. Australia-based Vision Systems Ltd., a manufacturer of automated instruments, antibodies and biochemical reagents used for cancer and other disease detection, was integrated with Leica Microsystems after it was acquired, forming Leica Biosystems. Vision’s revenue grew about 30% in 2007, compared with when it was a standalone company in 2006.

Dental core revenues grew at a mid-single-digit rate, with increased sales volumes coming from restorative and orthodontia products, as well as instrument and treatment products. Within the dental portfolio are products made by KaVo, a manufacturer of digital dental imaging products, precision dental hand pieces, treatment units and diagnostic systems; and Sybron Dental Specialties, a provider of dental consumables and small equipment for the professional dental market. Some of the brands under the dental umbrella include Gendex, Dexis, Pelton & Crane, Ormco, Kerr and Imaging Sciences International.

Finally, Radiometer’s core sales increased at a high-single-digit rate as a result of strong instrument placements globally. Radiometer is a provider of diagnostic equipment such as blood gas analyzers, with manufacturing facilities in North America and Europe. Growth for Radiometer was fueled by increased sales of diagnostic instruments in Europe (particularly Russia) and, to a lesser extent, sales in North American and Asia-Pacific markets.

Danaher’s first quarter of 2008, ended March 28, showed total revenues of $3.03 billion, 20% higher than the $2.52 billion reported for the same period in 2007. Medical Technologies revenues totaled $758 million, an 11% increase from $684 million in the first quarter of 2007.