Market Overview

Rales Brothers Hoping For Repeat Of Danaher's M&A-Driven Success Story

Rales Brothers Hoping For Repeat Of Danaher's M&A-Driven Success Story
Related DHR
Earnings Scheduled For July 20, 2017
Benzinga's Top Upgrades, Downgrades For July 13, 2017
Eastern Bank Buys Guggenheim BulletShares —…–9 Corporate Bond, Danaher Corp, CVS Health ... (GuruFocus)

Steven and Mitchell Rales are hoping they will be able to repeat history following this week’s spinoff of Fortive Group (NYSE: FTV) from Danaher Corporation (NYSE: DHR). The brothers have built Danaher into a $43-billion-success story by taking an aggressive approach to M&A. Danaher has acquired more than 10 companies per year over the past decade and has steadily improved profit margins along the way.

Danaher shareholders received one share of Fortive for each share of Danaher owned.

“Fortive’s strategy will be the Danaher strategy,” Edward Jones analyst Jeff Windau explained. “The board and the senior management have been doing this for quite some time and they’ve had a lot of success.”

Related Link: Need A Money Manager? Don't Get Blinded By Past Performance

Fortive’s senior managers have overseen more than 200 acquisitions during their time at Danaher, and CEO Jim Lico said the spinoff has the power to make $3 billion in deals within the next three years.

The Rales brothers founded Danaher in the early 1980s and have now become billionaires in the wake of its success. Steve reportedly has a net worth of $2.3 billion and Mitchell is worth $1.1 billion.

Traders looking to get in on the spinoff have a high price to pay. Credit Suisse analyst Julian Mitchell said Fortive's current share price “already reflects a premium multiple to peers despite in-line-with-peer financial metrics.”

Disclosure: The author holds no position in the stocks mentioned.

Latest Ratings for DHR

Jul 2017CitigroupMaintainsBuy
Jul 2017Wells FargoInitiates Coverage OnMarket Perform
Jun 2017Janney CapitalDowngradesBuyNeutral

View More Analyst Ratings for DHR
View the Latest Analyst Ratings

Posted-In: Credit SuisseAnalyst Color News Stock Split IPOs Analyst Ratings Tech Trading Ideas Best of Benzinga


Related Articles (DHR)

View Comments and Join the Discussion!