Danaher to buy Pall in $13.8bn cash deal

Danaher, a US industrial and healthcare equipment company, is to acquire Pall, a maker of water-filtration systems, in a $13.8bn all-cash deal.

Announcing the merger on Tuesday, Danaher also said it would split itself into a science and technology company, including Pall, and an industrial company before the end of next year.

The science and technology arm, which will retain the Danaher name, will add Pall to Danaher's dental, life sciences and water quality businesses, which combined had revenues of about $16.5bn last year, the company said.

The businesses being spun into the new industrial company, which takes the name NewCo, had revenues of about $6bn last year.

The price of $127.20 per share represents a 28 per cent premium to Pall's closing price on Monday, before the Wall Street Journal reported Pall may sell itself.

Ryan Mendy, chief executive of The Edge Consulting Group, a corporate research company, said investors should welcome the deal because Danaher has "basically cleaned up its business".

"Danaher had a handful of unrelated businesses with absolutely no synergies whatsoever," he said.

Shares in Danaher - with a market capitalisation of about $62bn - rose 2 per cent on Wednesday. Pall's share price rose 5 per cent to $124.25.

Acquiring Pall would "likely please" Danaher's investors because it would complement Danaher's water quality unit, analysts at Jefferies wrote in a note last week.

Pall is the largest "pure-play fluid filtration asset" in the public arena and has a scarcity value as one of the few leading bioprocessing properties in a rapidly consolidating space, they wrote.

For the fiscal year that ended in July 2014, Pall generated revenues of $2.8bn.

Pall's "best-in-class technology" makes it the "premier brand in the filtration industry", Thomas Joyce, Danaher's chief executive, said.

The deal "strengthens our life sciences position in the strategically-attractive, high-growth biopharmaceutical market."

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