Diversified U.S. manufacturer Danaher Corp
Danaher said it would buy the life sciences instrumentation business of Canada's MDS Inc
It also signed a definitive agreement, in a separate but linked transaction, with Life Technologies Corp
The businesses being acquired have double-digit operating profit margins, Chief Executive Larry Culp said on a conference call.
We believe we are acquiring two outstanding businesses with great brands and technological leadership, which are well-positioned in attractive markets that they serve, Culp said.
The deals will add about $650 million in annual revenues to Danaher's medical technologies segment, bringing its sales to $4 billion.
Culp said with the deals, Danaher's medical technologies, test and measurement, environmental and product identification platforms will account for three-quarters of company revenue.
FURTHER JOB CUTS
Separately, the Washington-based company, which will eliminate a total of 3,300 positions this year, now expects restructuring costs to total $225 million to $250 million for 2009, up from its prior estimate of $150 million to $170 million.
It expects to save about $220 million annually through the restructuring, which also includes closing 30 facilities.
Danaher had earlier estimated it would cut about 2,300 positions. It said it was making the added cuts even though it was optimistic about the continuing signs of stabilization that it has seen during the first two months of the third quarter.
We're pleased with what we've seen the last two months, Culp said. But we're not going to begin to celebrate that we have a hard and fast recovery.
MDS also said it would seek a buyer for its pharma division, leaving the life-sciences company to narrow its scope to selling medical isotopes used in diagnosing cancer.
MDS also said it sees third-quarter revenue in the range of $190 million to $195 million, and adjusted EBITDA of $5 million to $10 million from continuing operations hurt by slumping demand for its products and a prolonged shutdown of a key nuclear reactor that makes the isotopes.
Shares of Danaher closed at $60.42 Tuesday on the New York Stock Exchange. MDS shares closed Tuesday at C$6.42 on the Toronto Stock Exchange.
(Reporting by Nick Zieminski in New York, Scott Anderson in Torontio and A.Ananthalakshmi in Bangalore)