Danaher is a well-diversified industrial and medical conglomerate whose products test, analyze, and diagnose. Its subsidiaries design, manufacture, and market products and offer services geared at worldwide professional, medical, industrial, and commercial markets. Danaher operates through five segments: Life Sciences & Diagnostics (research and clinical tools), Test & Measurement (electronic measurement instruments), Industrial Technologies (product identification, motion control equipment, and sensors), Environmental (turbine pumps and air/water analysis and treatment equipment), and Dental (orthodontic bracket systems and lab products).
Change in Company Type
Danaher agreed to acquire Pall Corporation, a major supplier of filtration, separation, and purification technologies, for $13.8 billion in mid-2015. Upon completion of the deal, Danaher plans to separate the combined company into two independent, publicly traded companies: a science and technology company, which will retain the Danaher name (and will include Pall); and a diversified industrial company, which will comprise Danaher's test and measurement instruments operations.
Danaher has around 270 manufacturing and distribution facilities worldwide. Almost 140 of these facilities are located in the US in more than 25 states; roughly 130 locations reside outside the US in over 50 other countries throughout Asia, Europe, North America, South America and Australia. The company generates almost half of its revenue from North America, primarily the US (43% of sales).
Built largely through acquisitions, Danaher's five business segments reflect a well balanced portfolio. Top segments Life Sciences and Test & Measurement accounted for 36% and 18% of revenues in fiscal 2014, respectively. Life Sciences products include imaging systems, acute care equipment (blood gas measurement devices), pathology diagnostics (tissue embedding and chemical reagents), and instrumentation (microscopes).
Key Danaher subsidiaries include Beckman Coulter, Matco Tools Corporation, Jacobs Vehicle Systems, Tektronix, X-Rite, EskoArtwork, Linx Printing Technologies, Fluke Corporation, Keithley Instruments, Sybron Dental Specialties, Trojan Technologies, Gems Sensors, Gilbarco, and Sea-Bird Electronics.
Danaher has enjoyed five straight years of unprecedented growth. Its revenues rose by 4% from $19.1 billion in 2013 to peak at a record-setting $19.9 billion in 2014. Profits remained relatively flat, however, falling 4% from $2.7 billion in 2013 to $2.6 billion in 2014 due to higher income taxes and the selling of certain marketable equity securities. The company's operating cash flow has also trended upwards the last few years, rising 5% in 2014.
The company's historic growth for 2014 was led by a 7% increase in Environmental segment sales, resulting from growth in analytical instrumentation product lines in North America, China, Europe, and Latin America. Life Sciences & Diagnostics sales spiked 5% due to growth in demand of its existing businesses across China and other high-growth markets, along with additional revenue from a previous acquisition. Dental segment sales also grew 5%, resulting from increased demand for imaging products, instruments, and implant products, along with modest growth in dental consumables.
Already its top segment, Danaher is working to get an even larger foothold in the life sciences sector, whose growth is being driven by such factors as aging populations, increased preventive health care, and US health care reforms. It is also seeking opportunities to beef up its industrial business. To this end, Danaher uses a combination of divestitures and acquisitions.
In its largest potential acquisition to date, Danaher agreed to acquire Pall Corporation, a major supplier of filtration, separation, and purification technologies, for $13.8 billion in mid-2015. Upon completion of the deal, Pall will operate as a subsidiary in Danaher's portfolio and will maintain its brand. Danaher also has announced its intention to separate the combined company into two independent, publicly traded companies: a science and technology company, which will retain the Danaher name (and will include Pall); and a diversified industrial company, which will comprise Danaher's test and measurement instruments operations.
In 2015 Danaher purchased Nobel Biocare Holding for $2.2 billion. The deal is expected to significantly widen Danaher's market presence in the global dental industry. Headquartered in Zurich, Switzerland, Nobel Biocare serves customers in 80 markets globally, supplying dental implant systems, high-precision individualized prosthetics, and biomaterials and digital diagnostics products.
Danaher sold most of its communications unit -- composed of Tektronics, Fluke Networks and Arbor Networks -- to NetScout in 2014.