07.26.17
$7.8 Billion ($16.9B total)
KEY EXECUTIVES:
Steven M. Rales, Chairman of the Board
Thomas P. Joyce Jr., President and CEO
Daniel L. Comas, Exec. VP and CFO
William H. King, Sr. VP, Strategic Development
Daniel A. Raskas, Sr. VP, Corporate Development
NUMBER OF EMPLOYEES: 62,000 (total)
GLOBAL HEADQUARTERS: Washington, D.C.
One business leaves, and another enters.
Washington D.C.-based Danaher Corp. first broke the news that Fortive Corporation—a conglomerate of its Test & Measurement, Industrial Technologies, and Retail/Commercial Petroleum businesses—would be spun off in 2015. The separation was completed July 2, 2016, and Fortive commenced trading on the New York Stock Exchange three days later under the ticker “FTV.” With 20,000 employees worldwide, Fortive is comprised of two segments, Professional Instrumentation and Industrial Technologies, and is headquartered in Everett, Wash. The company enters the market in a strong position, with a sizeable share of the professional instrumentation, automation, and sensing and transportation technologies businesses. Fortive generated $6.2 billion in sales in 2015.
“This is an exciting day for Danaher. The successful spin-off of Fortive is an exceptional opportunity for both Danaher and Fortive to independently build greater shareholder value, to serve customers and to deliver on strategic priorities by investing in high-impact organic and inorganic growth opportunities,” Danaher President and CEO Thomas P. Joyce Jr. said in a company press release proclaiming the separation’s culmination.
About two months later, Danaher declared it would be purchasing global molecular diagnostics firm Cepheid for $4 billion—the latest in the company’s annual multi-billion dollar buys. (Danaher acquired its Beckman Coulter diagnostics business for $5.9 billion in 2011, dental implants firm Nobel Bioservices AG for $2.2 billion in 2014, and filtration, separation, and purification solutions company Pall Corporation for $13.8 billion in 2015.)
Cepheid added a suite of accurate and easy-to-use molecular systems and tests to Danaher’s Diagnostics business. Cepheid’s fully automated GeneXpert systems provide rapid genetic testing and results to manage infectious diseases, and the company touts a large global installed base of instruments and test menus for molecular diagnostics. Headquartered in Sunnyvale, Calif., Cepheid joins the Diagnostic segment’s Beckman Coulter, Leica Biosystems, and Radiometer businesses.
“We expect Cepheid to be an excellent complement to our existing Diagnostics businesses and to expand our runway for growth across the platform,” Joyce commented in a press release detailing the buy. “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. By applying the Danaher Business System and combining Cepheid with our existing $5 billion revenue position in the diagnostics industry, we believe that Cepheid will be well-positioned to improve operational efficiencies, significantly expand margins, and drive long-term growth. We look forward to welcoming the Cepheid team to Danaher.”
The acquisition closed on Nov. 4, 2016, establishing Cepheid as an indirect wholly owned subsidiary of Danaher’s Copper Merger Sub Inc. subsidiary.
ANALYST INSIGHTS: Danaher is a master at smart portfolio management. After building a large multi-industry conglomerate, the company spun off its industrial businesses last year to increase the focus on life sciences. Unlike some other companies, they won’t just “bolt-on” acquisitions; they will acquire to gain a presence in new categories. It makes them exciting to watch.
Danaher’s Diagnostics business became a separate business unit in 2016, previously part of the company’s Life Sciences & Diagnostics segment. [Editor’s note: The drop in medical device revenue from 2015’s $10.9 billion is not reflective of the fiscal 2016 (ended Dec. 31) performance due to the split—Danaher’s revenue as reported in last year’s top company report had previously included the Life Sciences segment.] Danaher as a whole performed quite admirably in 2016, achieving double-digit sales growth with $16.9 billion in total revenue.
The Diagnostics business—which offers analytical instruments, reagents, consumables, software, and services to diagnose disease and make treatment decisions—rose 4 percent in sales from the previous year to $5 billion. Heightened demand for immunoassay products stimulated the majority of this growth, combined with substantial consumable sales for acute care diagnostics in the Chinese, Western European, North American, and Japanese markets. Further expansion was prompted by increased North American and Chinese demand for staining consumables, as well as strong Chinese core histology equipment sales. Somewhat contributing to growth, in 2016 Danaher’s Radiometer business launched the TCM5 Flex, a transcutaneous monitor that measures ventilation for patients in critical condition.
The Cepheid acquisition was completed late in the year, so while it promises to invigorate Danaher’s molecular diagnostics sales and earnings in 2017, it did not make a major impact on 2016.
Danaher’s Dental business is a worldwide provider of a broad range of dental consumables, equipment, and services used to diagnose, treat, and prevent disease and ailments of the teeth, gums, and supporting bone, as well as to improve the aesthetics of the human smile. According to Danaher, its dental products are used in over 95 percent of dentist offices worldwide. The segment was basically flat from 2015 (increasing less than 2 percent) with revenues of $2.8 billion. This slight bump was provoked by strong Chinese and North American implant solutions demand, combined with solid Chinese and Russian orthodontics sales. China’s annual dental revenue has proven to be an incredibly productive area for the business—it has escalated tenfold since 2010, posting sales of $150 million.
Equality in the workplace is an important facet of company performance and culture. At the end of 2016, Danaher was awarded a perfect score of 100 percent on the 2017 Corporate Equality Index (CEI), a national report on LGBT workplace equality corporate policies and practices. The 2017 CEI evaluated 1,043 businesses in the report for LGBT-related policies and practices including non-discrimination workplace protections, domestic partner benefits, transgender-inclusive healthcare benefits, competency programs, and public engagement with the LGBT community.
“We are working hard to continuously improve our culture to ensure our associates are truly engaged, where they feel empowered to deliver results for the business, and where they are able to come to work every day as themselves,” said Ernest Adams, Danaher’s global diversity and inclusion leader. “The Human Rights Campaign’s recognition of Danaher as a Best Place to Work for LGBT Equality reflects our continued commitment to building diverse and inclusive communities around the world.”
KEY EXECUTIVES:
Steven M. Rales, Chairman of the Board
Thomas P. Joyce Jr., President and CEO
Daniel L. Comas, Exec. VP and CFO
William H. King, Sr. VP, Strategic Development
Daniel A. Raskas, Sr. VP, Corporate Development
NUMBER OF EMPLOYEES: 62,000 (total)
GLOBAL HEADQUARTERS: Washington, D.C.
One business leaves, and another enters.
Washington D.C.-based Danaher Corp. first broke the news that Fortive Corporation—a conglomerate of its Test & Measurement, Industrial Technologies, and Retail/Commercial Petroleum businesses—would be spun off in 2015. The separation was completed July 2, 2016, and Fortive commenced trading on the New York Stock Exchange three days later under the ticker “FTV.” With 20,000 employees worldwide, Fortive is comprised of two segments, Professional Instrumentation and Industrial Technologies, and is headquartered in Everett, Wash. The company enters the market in a strong position, with a sizeable share of the professional instrumentation, automation, and sensing and transportation technologies businesses. Fortive generated $6.2 billion in sales in 2015.
“This is an exciting day for Danaher. The successful spin-off of Fortive is an exceptional opportunity for both Danaher and Fortive to independently build greater shareholder value, to serve customers and to deliver on strategic priorities by investing in high-impact organic and inorganic growth opportunities,” Danaher President and CEO Thomas P. Joyce Jr. said in a company press release proclaiming the separation’s culmination.
About two months later, Danaher declared it would be purchasing global molecular diagnostics firm Cepheid for $4 billion—the latest in the company’s annual multi-billion dollar buys. (Danaher acquired its Beckman Coulter diagnostics business for $5.9 billion in 2011, dental implants firm Nobel Bioservices AG for $2.2 billion in 2014, and filtration, separation, and purification solutions company Pall Corporation for $13.8 billion in 2015.)
Cepheid added a suite of accurate and easy-to-use molecular systems and tests to Danaher’s Diagnostics business. Cepheid’s fully automated GeneXpert systems provide rapid genetic testing and results to manage infectious diseases, and the company touts a large global installed base of instruments and test menus for molecular diagnostics. Headquartered in Sunnyvale, Calif., Cepheid joins the Diagnostic segment’s Beckman Coulter, Leica Biosystems, and Radiometer businesses.
“We expect Cepheid to be an excellent complement to our existing Diagnostics businesses and to expand our runway for growth across the platform,” Joyce commented in a press release detailing the buy. “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. By applying the Danaher Business System and combining Cepheid with our existing $5 billion revenue position in the diagnostics industry, we believe that Cepheid will be well-positioned to improve operational efficiencies, significantly expand margins, and drive long-term growth. We look forward to welcoming the Cepheid team to Danaher.”
The acquisition closed on Nov. 4, 2016, establishing Cepheid as an indirect wholly owned subsidiary of Danaher’s Copper Merger Sub Inc. subsidiary.
ANALYST INSIGHTS: Danaher is a master at smart portfolio management. After building a large multi-industry conglomerate, the company spun off its industrial businesses last year to increase the focus on life sciences. Unlike some other companies, they won’t just “bolt-on” acquisitions; they will acquire to gain a presence in new categories. It makes them exciting to watch.
—Dave Sheppard, Co-Founder and Principal, MedWorld Advisors
Danaher’s Diagnostics business became a separate business unit in 2016, previously part of the company’s Life Sciences & Diagnostics segment. [Editor’s note: The drop in medical device revenue from 2015’s $10.9 billion is not reflective of the fiscal 2016 (ended Dec. 31) performance due to the split—Danaher’s revenue as reported in last year’s top company report had previously included the Life Sciences segment.] Danaher as a whole performed quite admirably in 2016, achieving double-digit sales growth with $16.9 billion in total revenue.
The Diagnostics business—which offers analytical instruments, reagents, consumables, software, and services to diagnose disease and make treatment decisions—rose 4 percent in sales from the previous year to $5 billion. Heightened demand for immunoassay products stimulated the majority of this growth, combined with substantial consumable sales for acute care diagnostics in the Chinese, Western European, North American, and Japanese markets. Further expansion was prompted by increased North American and Chinese demand for staining consumables, as well as strong Chinese core histology equipment sales. Somewhat contributing to growth, in 2016 Danaher’s Radiometer business launched the TCM5 Flex, a transcutaneous monitor that measures ventilation for patients in critical condition.
The Cepheid acquisition was completed late in the year, so while it promises to invigorate Danaher’s molecular diagnostics sales and earnings in 2017, it did not make a major impact on 2016.
Danaher’s Dental business is a worldwide provider of a broad range of dental consumables, equipment, and services used to diagnose, treat, and prevent disease and ailments of the teeth, gums, and supporting bone, as well as to improve the aesthetics of the human smile. According to Danaher, its dental products are used in over 95 percent of dentist offices worldwide. The segment was basically flat from 2015 (increasing less than 2 percent) with revenues of $2.8 billion. This slight bump was provoked by strong Chinese and North American implant solutions demand, combined with solid Chinese and Russian orthodontics sales. China’s annual dental revenue has proven to be an incredibly productive area for the business—it has escalated tenfold since 2010, posting sales of $150 million.
Equality in the workplace is an important facet of company performance and culture. At the end of 2016, Danaher was awarded a perfect score of 100 percent on the 2017 Corporate Equality Index (CEI), a national report on LGBT workplace equality corporate policies and practices. The 2017 CEI evaluated 1,043 businesses in the report for LGBT-related policies and practices including non-discrimination workplace protections, domestic partner benefits, transgender-inclusive healthcare benefits, competency programs, and public engagement with the LGBT community.
“We are working hard to continuously improve our culture to ensure our associates are truly engaged, where they feel empowered to deliver results for the business, and where they are able to come to work every day as themselves,” said Ernest Adams, Danaher’s global diversity and inclusion leader. “The Human Rights Campaign’s recognition of Danaher as a Best Place to Work for LGBT Equality reflects our continued commitment to building diverse and inclusive communities around the world.”