Targeted drug

25 February 2019 By Robert Cyran, Tom Buerkle Follow @rob_cyran

CEO Larry Culp is unloading the conglomerate’s biologics unit to his old employer for $21 bln. It’s his boldest downsizing move yet and will help cut leverage. Danaher gains scale in its health business at a reasonable price while Culp needed a sale, not necessarily top dollar.

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General Electric on Feb. 25 said it had agreed to sell its BioPharma business to Danaher for a total consideration of $21.4 billion, which includes $21 billion in cash and the assumption of certain pension liabilities.

The business, which makes instruments, cell culture media and software for the development and production of drugs, is expected to generate approximately $3.2 billion of revenue in 2019, according to Danaher. The net purchase price of about $20 billion, after anticipated tax benefits, represents a multiple of some 17 times expected EBITDA this year, Danaher said.

GE shares opened nearly 14 percent higher at $11.57 on Feb. 25 while Danaher stock was up just over 9 percent at $123.94 at the open.

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