18. Danaher
$4.1 Billion ($13.2B total)
KEY EXECUTIVES:
Steven M. Rales, Chairman
H. Lawrence Culp Jr., President & CEO
Daniel L. Comas, Exec. VP & CFO
Daniel A. Raskas, VP of Corporate Development
NO. OF EMPLOYEES: 46,600 (total)
GLOBAL HEADQUARTERS: Washington, D.C.
After a challenging fiscal 2009, 2010 was a bit of a rebound for Danaher Corp. The manufacturer of everything from environmental testing equipment to dental tools has remade its portfolio in recent years through both acquisitions and asset sales to focus on faster-growing, more profitable businesses that are less dependent on cyclical demand.
Some of that strategy may have paid off last year. Revenues for 2010 (fiscal year ended Dec. 31) were $13.2 billion compared with $11.2 billion for 2009, an increase of 18 percent. Earnings were $1.8 billion, compared with $1.2 billion in fiscal 2009.
During the fourth quarter of 2010, the company changed the composition of its reportable segments to reflect changes in its internal organization. It now reports results in five separate business segments consisting of Test & Measurement; Environmental; Life Sciences & Diagnostics; Dental; and Industrial Technologies. Danaher previously reported its operations under four segments: Professional Instrumentation; Medical Technologies; Industrial Technologies; and Tools & Components.
Danaher’s Life Sciences and Diagnostics units provide technology for clinical histopathology laboratories, hospital central labs and point-of-care locations, as well as government, academic and pharmaceutical research laboratories. The Dental division provides devices for dental operatory, including dental consumables, digital imaging products, precision dental hand pieces, treatment units and diagnostic systems. On the medical device side, Danaher more likely is known for its varied product lines than its company moniker. Divisions include such brands as AB Sciex, Dexis, Gendex, Imaging Sciences International, Instrumentarium Dental, Invetech (a contract manufacturer with which Medical Product Outsourcing readers may be familiar), KaVo, Dessert, Kerr, Leica Microsystems, Ormco, Pelton & Crane, Radiometer, Soredex and SybronEndo.
The company’s Life Sciences & Diagnostics segment earned almost $2.3 billion for fiscal 2010, up sharply from nearly $1.5 billion in 2009, due in large part to the acquisitions of AB Sciex and Molecular Devices (announced in 2009 and completed in February 2010). The acquisitions were responsible for 46 percent of revenue growth. Without them, sales for the division grew 9 percent. Increased European demand for the business’ cardiac care instruments as well as continued strong consumable sales related to the business’ installed base of acute care diagnostic instrumentation also contributed to year-over-year sales growth, officials noted.
The company’s dental business earned $1.8 billion in fiscal 2010, up from approximately $1.7 billion. Life-sciences businesses profited the firm by $228 million, up from $180 million in fiscal 2009. Net earnings for the dental business dipped by 5.6 percent to $203 million from $215 million in 2009. Research and development spending for life sciences and diagnostics businesses was $193 million, up significantly from $117 in 2009. Dental R&D also rose to $73 million from $52 million.
Early in 2011, Danaher added a high-profile name to its portfolio of diagnostic brands housed under its Life Sciences & Diagnostics division and another company on this year’s Top 30 list: Beckman Coulter. The purchase price was $6.8 billion, with the deal completed in late June this year. The purchase raised Danher’s stock price to its highest level since the 1980s when the company was founded. Last year, Beckman hired investment firm Goldman Sachs to help with the possible sale of the company. Prior to that, Beckman Coulter had experienced a volatile year in which CEO Scott Garrett abruptly resigned following a product recall and troubles with the U.S. Food and Drug Administration.
For the immediate future, medical technology businesses will make up about 47 percent of Danaher’s sales after the acquisition, though CEO H. Lawrence Culp said that figure probably would drop to 40 percent over time.
“Beckman Coulter is an iconic company with a great brand, broad reach and technology leadership; well positioned in the markets it serves. Beckman provides an excellent complement to our existing Life Sciences & Diagnostics businesses,” said Culp. “Being part of Danaher, Beckman associates will have the opportunity to leverage the power of the Danaher Business System, including the processes by which Danaher accelerates growth through new product innovation and driving sales, marketing and service, as well as its strength in continuously expanding margins.”
Across all five business segments, company officials claim the firm launched more than 1,800 new products. Notably, in the diagnostics sector, the company’s Radiometer division launched the ABL90 FLEX blood gas analyzer targeting mid-volume point-of-care testing in clinical applications and the ABL80 FLEX designed for the emerging markets. Overall Danaher sales in emerging markets expanded by 20 percent in fiscal 2010.
The name Danaher comes from the ancient Celtic word “Dana,” which means “swift flowing.” It certainly seems as if the company has moved swiftly throughout 2010 and the beginning of 2011 to grow its presence in medical technology.