Danaher to pick up Cepheid in $4B deal

GeneXpert Systems--Courtesy of Cepheid

Danaher announced Tuesday that it has entered an agreement to acquire molecular diagnostics player Cepheid for approximately $4 billion.

Cepheid specializes in molecular diagnostics and markets tests to detect healthcare-associated infections, such as MRSA and norovirus, as well as tests for infectious disease, sexual health and for the genetic risk of thrombosis. The tests are run on its GeneXpert systems, a family of molecular diagnostics systems that come in a range of capacities and includes the GeneXpert Omni, which can be used outside the lab. The system automates sample preparation, nucleic acid amplification and detection of target sequences using polymerase chain reaction (PCR). It generates both detailed and summarized results in tables and graphs.

Danaher has been somewhat of a serial acquirer, dropping about $1 billion in 14 acquisitions in 2013, mostly in high-growth countries, such as China and Brazil. More recently, it closed in on a $30 million buyout of Israel’s Applied Spectral Imaging in July last year and purchased Pall Corporation for $13.8 billion in May. The company has 5 major business units: dental, industrial technologies, test and measurement, environmental and life sciences and diagnostics.

In 2015, Cepheid posted $539 million in sales and in 2016, the diagnostics maker expected to reel in between $618 million and $635 million in revenues. The acquisition will provide Danaher with a sizable bump to its $5 billion diagnostics business, which currently includes Beckman Coulter, Leica Biosystems and Radiometer.

"We expect Cepheid to be an excellent complement to our existing Diagnostics businesses and to expand our runway for growth across the platform,” said Danaher CEO Thomas Joyce, Jr., in a statement. “Cepheid's extensive installed base, test menu and innovative product offering contribute to its market leadership in molecular diagnostics and we expect it to strengthen our position in this high-growth segment."

The deal will see buying all outstanding Cepheid shares for $53 per share in cash, according to the statement. It is expected to close by the end of this year.