Danaher Corporation will consolidate its position in the supplier space through the $21.4 billion acquisition of GE Healthcare’s biopharma division. The business will not be integrated with Pall.
The deal, expected to be completed in the fourth quarter of 2019, will see Danaher Corporation buy the full BioPharma portion of GE Healthcare’s Life Sciences business for a cash purchase price of approximately $21.4 billion (€18.9 billion).
The business, which pulls in about $3 billion in annual revenue, provides tools to aid cell biology and protein research, along with equipment for the development and production of monoclonal antibodies, biological therapies, vaccines, insulin and advanced cell and gene therapies.
The sale does not include GE Life Sciences’ Pharmaceutical Diagnostics business, which includes technology like contrast media and imaging agents.
The sale accelerates GE’s plans to spin out its Healthcare business, announced last June, and has been described as “a good deal for a good business” by a GE spokesperson.
“We are selling the business for 7x revenue and it fits very well with Danaher,” the spokesperson told BioProcess Insider. “We also retain full flexibility for growth and strategic optionality for our remaining, attractive $17 billion Healthcare business.”
Danaher Corporation already has a foot in the bioprocess space through its $13.8 billion acquisition of Pall Corporation in 2015.
Pall’s business includes upstream and downstream equipment and technologies for the biopharma sector, but according to Danaher the GE bioprocessing business will not be combined.
“The business will be established as a stand-alone operating company within Danaher’s $6.5 billion Life Sciences segment so no integration with Pall,” a spokesperson told us, adding “the businesses are very complementary, so no divestitures expected.”
If the deal closes as expected, the big end of the bioprocessing industry will become slightly more consolidated, with Danaher controlling both GE and Pall, competing against Thermo Fisher, Sartorius and MilliporeSigma.
Life Sciences analyst Ross Muken from ISI Evercore greeted the deal positively, claiming this is “the transaction Danaher shareholders have been clamoring for,” in a note. He added the deal reminds him of Thermo Fisher’s $15.8 billion acquisition of Life Technologies in 2014, as it creates massive value for shareholders.
“They acquire into tremendous assets, uniquely leveraged to biopharma manufacturing, with a market leading footprint notably in downstream. The business likely grows 6-7% and this could prove conservative once matched up with Pall.”