Morgan Stanley Reiterates Overweight on Danaher

Morgan Stanley remains Overweight-rated on Danaher

as the company reenters the M&A market with the acquisition of X-Rite. Morgan Stanley notes, "This morning, Danaher announced that it has entered an agreement to acquire X-Rite, Inc.

for $5.55/share (10% premium to its 52w high), and including assumption of $145m of net debt, total EV is $625m. …Strategically, the deal looks consistent with DHR's previously communicated intentions to grow Product ID via M&A, as well as increasing exposure to Industrial markets vs. Med-Tech. While the business is already operating at 26% EBITDA margins, there should be good overlap and synergy opportunities within the existing PID platform, especially with Esko Artwork." DHR closed at $54.59 a share yesterday.