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Sep 2, 2009

Danaher Snags Life Technologies’ MS Business and MDS Analytical Technologies for $1.1B

  • Danaher is shelling out $1.1 billion for MDS’ analytical technologies division and the Applied Biosystems/MDS Sciex mass spectrometry joint venture (AB SCIEX) held by Life Technologies. These two separate transactions are expected to close in the fourth quarter.

    Life Technologies will sell its mass spectrometry business, which represents a 50% stake in the JV, for $450 million in cash. Danaher will also pick up Life Technologies’ JV partner, MDS Analytical Technologies, for $650 million in cash, thus gaining the remaining 50% of AB SCIEX.

    For Life Technologies, Greg Lucier, chairman and CEO, says that the sale of its mass spectrometry business will enable the firm to go on leveraging its expertise in DNA, RNA, proteins, and cells. “We will continue to drive breakthroughs in life science research, genomic medicine, molecular diagnostics, and applied markets,” Lucier says.

    MDS, on the other hand, intends to return approximately $400 million to $450 million of the sale proceeds to its shareholders. Additionally, the firm reports that it is looking to sell the MDS pharma services business, a provider of drug discovery and early-stage development solutions. On June 1 the company said that it was seeking a buyer for its central labs business.

    The reason for these divestitures is that the company would like to focus solely on its MDS nordion business, a supplier of medical isotopes for molecular and diagnostic imaging, radiotherapeutics, and sterilization technologies.

    “The economic downturn and the prolonged shutdown of Atomic Energy of Canada (AECL) National Research Universal (NRU) reactor have created significant challenges for our businesses that contributed to this course of action," explains Stephen P. DeFalco, president and CEO of MDS. Despite the current shutdown of AECL's NRU reactor, MDS nordion continues to deliver positive adjusted EBITDA and cash flow from sterilization technologies and radiopharmaceuticals, according to the company.

    For Danaher its $1.1 billion buy will expand annual revenues of the medical technologies segment by more than $650 million. The acquired businesses will push its life science related and diagnostic revenues over $2 billion annually, the company adds.

    The firm gains bioresearch and analytical instrumentation as well as consumables from MDS Analytical Technologies, which includes approximately 1,100 employees operating in 10 countries. It also obtains design and manufacturing capabilities from AB SCIEX for mass spectrometers. The purchased businesses will operate within Danaher's Medical Technologies segment, joining Danaher's Leica, Radiometer, Sybron, and KaVo businesses.

     



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