Danaher Corporation (NYSE:DHR) ("Danaher") today announced its intention
to separate the company into two independent, publicly traded companies.
The transaction will create:
A science and technology growth company united by common business model
characteristics, including significant recurring revenue and an
attractive margin profile. The company will retain the Danaher name.
Collectively, its businesses generated approximately $16.5 billion in
revenues (including Pall Corporation, which Danaher has signed an
agreement to acquire), in their most recently completed fiscal years.
A diversified industrial growth company ("NewCo") with market leading
positions, strong brand names and tremendous free cash flow generation.
NewCo's businesses generated approximately $6.0 billion in revenues in
the most recently completed fiscal year.
The transaction is expected to occur through a tax-free separation.
Thomas P. Joyce, Jr., President and Chief Executive Officer, stated,
"This is an exciting day for Danaher and an important step in our
company's history. Danaher has always been at its best when all
platforms have the ability to invest in the highest impact organic
growth opportunities, pursue meaningful acquisitions and use the Danaher
Business System to continuously improve performance. The pending
strategic acquisition of Pall Corporation announced today offers us the
unique opportunity to drive greater shareholder value going forward as
two stronger and better companies. Each company will be more focused
with access to the capital necessary to pursue organic and inorganic
growth opportunities. DBS will remain the foundation of both companies,
allowing each to further strengthen their market leading positions while
continuously improving growth, margins and cash flow."
Thomas P. Joyce, Jr. and Daniel L. Comas will continue to serve as
President and Chief Executive Officer and Executive Vice President and
Chief Financial Officer of Danaher, respectively, following the
completion of the transaction.
James A. Lico, currently Executive Vice President with responsibility
for Danaher's Test & Measurement and Gilbarco Veeder-Root businesses,
will become President and Chief Executive Officer of NewCo upon
separation.
"I am honored and humbled that the Board has selected me to lead this
new diversified industrial growth company," said Mr. Lico. "As a
standalone company, we will have the opportunity to pursue a more
focused growth strategy with a renewed emphasis on M&A for many of these
businesses. We have an outstanding team that will ensure this separation
goes smoothly and that the company will continue to win in the markets
in which we compete. I am committed to building and reinforcing the DBS
culture and ensuring the company exceeds our customers, shareholders and
associates' expectations."
Steven M. Rales, Chairman of the Danaher Board of Directors, remarked,
"Jim will be a fantastic leader and the Board looks forward to working
closely with him to make sure this separation is executed to the Danaher
standard. We are confident that the separation will give both companies
additional focus to better serve their customers' needs while providing
substantial opportunities for our associates and creating greater value
for our shareholders."
DANAHER
Danaher will be united by common business model characteristics,
including high recurring revenue and gross margins, and will be well
positioned to improve profitability, grow organically and deploy capital
to generate substantial earnings growth. It will enjoy leading positions
in markets with favorable secular growth trends.
The science and technology growth company will include Danaher's
existing Life Sciences & Diagnostics and Dental segments, Water Quality
and Product Identification platforms and Pall Corporation.
NEWCO
NewCo, a diversified industrial growth company, will have market leading
positions and outstanding brands in such areas as test and measurement,
retail fueling, telematics and automation. It will comprise Danaher's
Test & Measurement Instruments platform including Matco, Gilbarco
Veeder-Root, Automation and Sensors, as well as its other Specialty
Industrial businesses. As a smaller, standalone entity, NewCo is
expected to have an outstanding margin profile and tremendous free cash
flow generation allowing it to accelerate its revenue and earnings
growth trajectorys while providing flexibility in capital deployment.
TRANSACTION DETAILS
The Company is targeting to complete the separation around the end of
calendar year 2016, subject to the satisfaction of closing conditions,
including obtaining final approval from the Danaher Board of Directors,
satisfactory completion of financing, receipt of tax opinions, receipt
of favorable rulings from the Internal Revenue Service and receipt of
other regulatory approvals.
CONFERENCE CALL
Danaher will host a conference call to discuss the transaction on May 13
at 8:30 a.m. ET. Access the call by dialing 877-397-0292 in the U.S., or
719-325-4762 internationally, and telling the operator that you are
dialing in for Danaher's investor conference call (access code 8662810).
A replay of the conference call will be available shortly after the
conclusion of the call and until Wednesday, May 20, 2015. The replay can
be accessed by dialing 888-203-1112 within the U.S., or 719-457-0820
internationally, with the access code 8662810. In addition, presentation
materials relating to Danaher's acquisition of Pall have been posted to
the "Investors" section of Danaher's website.
ABOUT DANAHER
Danaher is a global science and technology innovator committed to
helping its customers solve complex challenges and improving quality of
life around the world. Its family of world class brands have leadership
positions in some of the most demanding and attractive industries,
including health care, environmental and industrial. The Company's
globally diverse team of 71,000 associates is united by a common culture
and operating system, the Danaher Business System. In 2014, Danaher
generated $19.9 billion in revenue and its market capitalization
exceeded $60 billion. For more information please visit: www.danaher.com.
FORWARD-LOOKING STATEMENTS
Statements in this release that are not strictly historical, including
the statements regarding the anticipated separation of Danaher into two
independent companies, the expected timetable for completing the
transaction, future financial and operating performance of each company,
benefits and synergies of the transaction, strategic and competitive
advantages of each company, the leadership of each company, future
opportunities for each company and any other statements regarding events
or developments that we believe or anticipate will or may occur in the
future are "forward-looking" statements within the meaning of the
federal securities laws. There are a number of important factors that
could cause actual results, developments and business decisions to
differ materially from those suggested or indicated by such
forward-looking statements and you should not place undue reliance on
any such forward-looking statements. These factors include, among other
things: economic conditions affecting the industries in which Danaher's
businesses operate, the uncertainty of regulatory approvals, Danaher's
ability to satisfy the necessary conditions to consummate the
transaction on a timely basis or at all, Danaher's ability to
successfully separate the two companies and realize the anticipated
benefits from the separation, the maintenance of important business
relationships, deterioration of or instability in the economy, the
markets we serve and the financial markets, the impact of our
restructuring activities on our ability to grow, contractions or growth
rates and cyclicality of markets we serve, competition, our ability to
develop and successfully market new products and technologies and expand
into new markets, the potential for improper conduct by our employees,
agents or business partners, our ability to successfully identify,
consummate and integrate appropriate acquisitions and successfully
complete divestitures and other dispositions, contingent liabilities
relating to acquisitions and divestures, our ability to close the
anticipated merger of our Communications business with NetScout, Inc.
and achieve the desired benefits of that transaction, our compliance
with applicable laws and regulations (including regulations relating to
medical devices and the healthcare industry) and changes in applicable
laws and regulations, our ability to effectively address cost reductions
and other changes in the healthcare industry, risks relating to
potential impairment of goodwill and other intangible assets, currency
exchange rates, tax audits and changes in our tax rate and income tax
liabilities, litigation and other contingent liabilities including
intellectual property and environmental, health and safety matters,
risks relating to product, service or software defects, product
liability and recalls, risks relating to product manufacturing, the
impact of our debt obligations on our operations and liquidity, our
relationships with and the performance of our channel partners,
commodity costs and surcharges, our ability to adjust purchases and
manufacturing capacity to reflect market conditions, reliance on sole
sources of supply, labor matters, international economic, political,
legal, compliance and business factors, disruptions relating to man-made
and natural disasters, security breaches or other disruptions of our
information technology systems and pension plan costs. Additional
information regarding the factors that may cause actual results to
differ materially from these forward-looking statements is available in
our SEC filings, including our 2014 Annual Report on Form 10-K and
Quarterly Report on Form 10-Q for the first quarter of 2015. These
forward-looking statements speak only as of the date of this release and
the Company does not assume any obligation to update or revise any
forward-looking statement, whether as a result of new information,
future events and developments or otherwise.
FOR INVESTOR INQUIRIES:
Danaher Corporation
Matthew E. Gugino, Vice President, Investor Relations
Telephone: (202) 828-0850, Fax: (202) 828-0860
or
FOR MEDIA INQUIRIES:
Sard Verbinnen & Co.
Hugh Burns/Delia Cannan,
Telephone: (212) 687-8080
Email: danaher-svc@sardverb.com