Danaher Accelerates Cuts, Buys 2 Firms

Danaher said Wednesday that it is accelerating a planned restructuring effort that will result in closing 30 facilities and eliminating about 3,300 jobs in an effort to save about $220 million annually.

The retrenching came the same day the D.C. manufacturer announced it is acquiring two related life sciences testing businesses designed to deepen the company's presence in the environment, medical- and food-testing sectors.

The conglomerate, which makes everything from dental-office instruments to Craftsman hand tools, said it will acquire AB Sciex of Toronto and Molecular Devices of California for $1.1 billion in cash and debt.

Like most U.S. manufacturers, Danaher has felt the effect of a severe recession. The company disappointed investors last quarter when it announced that revenue from its core businesses had fallen 15 percent from a year earlier. The company reported operating earnings of 89 cents, which was down from $1.08 for the same period a year ago.

News of the acquisitions and further cutbacks appeared to boost the company's stock. Danaher shares gained 2.83 percent Wednesday to close at $62.13.

In a research note Wednesday, Bank of America said "we positively view the strategic merits and purchase price of the proposed deals." It added that "Danaher is acquiring premier life sciences instrumentation businesses at an attractive price."

The acquisitions of two companies that make highly sophisticated measuring devices called mass spectrometers will increase Danaher's revenue in the life sciences and medical-testing fields by $650 million a year, according to the company.

Deutsche Bank called mass spectrometry "the gold standard" in its field, and said it sees "the potential for revenue synergies" with other Danaher businesses.

The acquired companies will operate as stand-alone businesses under the Danaher umbrella.

"We are excited about the opportunity to acquire two leading brands in the life sciences instrumentation market, which will complement our existing Medical Technologies businesses and present an attractive value creation opportunity," Danaher chief executive H. Lawrence Culp Jr. in a statement.

Danaher was founded by Mitchell P. Rales and Steven M. Rales, brothers who went to Walt Whitman High School in Montgomery County and named their firm after their favorite trout-fishing stream in Montana.

Earlier this year, Danaher outlined a restructuring plan calling for $150 million to $170 million in cuts. Wednesday's announcement boosts that effort by about $80 million, to between $225 million and $250 million, the company said.