Amid the current M&A feeding frenzy going on in the medical device jungle Danaher ($DHR) is the 800-pound gorilla quietly sitting on its hands as well as an estimated $12 billion available to make a deal--or several.
Known for its dealmaking, Danaher hasn't made an acquisition of at least $500 million since 2012, making it the longest stretch in 11 years the company has gone without a blockbuster announcement, Bloomberg reported. The result has been the worst start in a year for its stock as investors hold off buying the company's shares until it jumps into the fray, the news service said, citing Longbow Research.
"They're not the only ones in this boat, but they probably have more pressure than others given their size and ability," said Mark Douglass of Longbow.
The ruckus in the medical device industry, spurred in part by large companies looking to consolidate in response to the Affordable Care Act, hit a fever pitch with the announcement of Medtronic's ($MDT) acquisition of Covidien ($COV) for $42.9 billion. In April, Zimmer ($ZMH) signed a $13.4 billion deal to acquire Biomet to gain a stronger foothold in the orthopedics industry.
Orthopedics giant Stryker ($SYK) has been rumored to be seeking a deal with U.K. rival Smith & Nephew ($SNN) after completing 5 M&A deals that included the $1.7 billion purchase of robot-assisted surgery outfit Mako ($MAKO) and acquiring Chinese orthopedics giant Trauson Holdings for $764 million.
The question is, if Danaher does make a move who would they go after?
According to analysts Bloomberg talked to, Agilent ($A) is among the possible top targets. Last fall the company said it would split into two public companies, with one focused on life sciences, diagnostics and applied markets. Other potential companies are PerkinElmer ($PKI), which develops tools and equipment for clinical diagnostics and biomedical research, and U.K.-based Oxford Instruments ($OXIG), which produces X-ray tubes and spectrometers. Spokesmen for the companies, and for Danaher, either declined or were not available for comment to Bloomberg.
If Danaher does not do a big deal soon, the pressure could mount for the company to break itself up.
"The longer the dry spell persists those questions will persist," Citigroup's Deane Dray told Bloomberg. "The stock price is going to be one of the other measures. If it sits toward the low end of its range, you'll see more investor discontent."
- see the Bloomberg story