DC-Based Danaher to Pay $21B for GE’s BioPharma Unit
The GE BioPharma business is currently part of GE Life Sciences, which is headquartered in Marlborough, MA.
BOSTON—In its ongoing effort to strengthen its balance sheet, GE has reached a definitive agreement to sell its Biopharma business to Washington, DC-based Danaher Corp. in an all cash deal valued at $21.4 billion.
The deal, which is expected to close in the fourth quarter of 2019, also includes Danaher’s assumption of some pension liabilities.
The two companies have a common link—current GE chairman and CEO H. Lawrence Culp, Jr. Prior to joining GE, Culp served as CEO and president of Danaher Corp. from 2001 to 2014. He was named chairman and CEO of GE in late September 2018.
The GE BioPharma business is currently part of GE Life Sciences, which is headquartered in Marlborough, MA. Information on the Biopharma business workforce or its specific locations were not available at press time.
In 2018, the BioPharma business generated revenues of approximately $3 billion. The unit is a provider of instruments, consumables and software that support the research, discovery, process development and manufacturing workflows of biopharmaceutical drugs. The business comprises process chromatography hardware and consumables, cell culture media, single-use technologies, development instrumentation and consumables and service.
Upon completion of the sale, the GE Biopharma business will be established as a stand-alone operating company within Danaher’s $6.5-billion Life Sciences segment, joining the company’s Pall, Beckman Coulter Life Sciences, SCIEX, Leica Microsystems, Molecular Devices, Phenomenex and IDT businesses.
GE’s Culp says of the deal, “Today’s transaction is a pivotal milestone. It demonstrates that we are executing on our strategy by taking thoughtful and deliberate action to reduce leverage and strengthen our balance sheet.”
GE’s Pharmaceutical Diagnostics, currently part of GE Life Sciences, will remain within the GE Healthcare portfolio, the company stated. That business supplies contrast media and molecular imaging consumables for radiology customers worldwide.
Earlier this month, GE announced it was scaling back its much-heralded new corporate headquarters project in the Seaport District of Boston.
Danaher’s president and CEO Thomas P. Joyce, Jr., says, “”We expect GE Biopharma to advance our growth and innovation strategy in an important and highly attractive life science market. We see meaningful opportunities to harness the power of the Danaher Business System to further provide GE Biopharma’s customers with end-to-end bioprocessing solutions that help enable breakthrough development and production capabilities.”
Danaher, which is a global science and technology firm, expects to finance the all-cash transaction with approximately $3 billion of proceeds from an equity offering from available cash on hand and proceeds from the issuance of debt and/or new credit facilities. Based on the anticipated tax benefits from the transaction structure, Danaher calculates the net purchase price of the deal at approximately $20 billion.
The company expects GE Biopharma to generate revenue of approximately $3.2 billion in 2019, with approximately 75% of those revenues considered recurring.
Danaher estimates the acquisition will reduce GAAP diluted net earnings per share by approximately $1.15 to $1.20, but will be accretive to non-GAAP, adjusted diluted net earnings per share by approximately $0.45 to $0.50 in the first full year post acquisition.
PJT Partners LP, J.P. Morgan Securities LLC, Citigroup Global Markets Inc. and Goldman Sachs acted as financial advisors and Paul, Weiss, Rifkind, Wharton & Garrison LLP acted as legal advisor to GE on the transaction.
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