Danaher To Buy Cepheid For $4 Billion

Danaher Corporation DHR disclosed Tuesday that it reached a definitive merger deal with Cepheid CPHD to buy the latter for $53.00 a share in cash. The total enterprise value of the transaction is approximately $4 billion, which included indebtedness and net of acquired cash. The companies expect the transaction to be completed before the end of the current year.

Danaher it expects to fund the transaction with available cash and proceeds from debt issuance. The company expects the acquisition to be slightly dilutive to its GAAP EPS or accretive of about $0.05 in the first full year after acquisition. At the end of the fifth full year of acquisition, the company expects the transaction to add $0.30 to its adjusted EPS.

Earlier, Cepheid guided revenue between $618-$635 million for the year 2016. In 2015, the company generated revenue of $539 million.

Danaher's president and CEO, Thomas Joyce, commented, "We expect Cepheid to be an excellent complement to our existing Diagnostics businesses and to expand our runway for growth across the platform. Cepheid's extensive installed base, test menu and innovative product offering contribute to its market leadership in molecular diagnostics and we expect it to strengthen our position in this high-growth segment."

Following the news, CEPH traded up by $8.38, or 24.35 percent, to $42.80.