Danaher to split into two separate companies

Transaction will create a science and technology company and a diversified industrial company.

Danaher Corporation announced plans to separate the company into two independent publicly traded companies.

The transaction will create a science and technology growth company that will retain the Danaher name. Collectively, its businesses generated approximately $16.5 billion in revenues, which includes the Pall Corporation, which Danaher has signed an agreement to acquire.

The second company will be a diversified industrial growth company ("NewCo") with "market leading positions, strong brand names and tremendous free cash flow generation." NewCo's businesses generated approximately $6.0 billion in revenues.

The transaction is expected to occur through a tax-free separation.

"This is an exciting day for Danaher and an important step in our company's history. Danaher has always been at its best when all platforms have the ability to invest in the highest impact organic growth opportunities, pursue meaningful acquisitions and use the Danaher Business System to continuously improve performance," said Thomas P. Joyce Jr., president and chief executive officer. "The pending strategic acquisition of Pall Corporation announced today offers us the unique opportunity to drive greater shareholder value going forward as two stronger and better companies. Each company will be more focused with access to the capital necessary to pursue organic and inorganic growth opportunities."

Joyce will continue to serve as president and CEO and Daniel L. Comas will continue as executive vice president and chief financial officer of Danaher.

James A. Lico, currently executive vice president with responsibility for Danaher's Test & Measurement and Gilbarco Veeder-Root businesses, will become president and chief executive officer of NewCo upon separation.

"I am honored and humbled that the Board has selected me to lead this new diversified industrial growth company," said Lico. "As a standalone company, we will have the opportunity to pursue a more focused growth strategy with a renewed emphasis on M&A for many of these businesses. We have an outstanding team that will ensure this separation goes smoothly and that the company will continue to win in the markets in which we compete. I am committed to building and reinforcing the DBS culture and ensuring the company exceeds our customers, shareholders and associates' expectations."

Pall Corp. acquisition
Danaher agreed to acquire all of the outstanding shares of Pall for $127.20 per share in cash, or a total of approximately $13.8 billion, including assumed debt and net of acquired cash.

Pall is a global provider of filtration, separation and purification solutions that remove contaminants or separate substances from a variety of solids, liquids and gases. In its fiscal year ended July 2014, Pall generated consolidated revenues of $2.8 billion, with $1.5 billion from its Life Sciences segment and $1.3 billion from its Industrial segment. The Life Sciences segment serves customers in the fast-growing biopharmaceutical market, as well as food & beverage and medical end markets. The Industrial segment serves customers in the process technologies, aerospace and microelectronics markets.

"Pall is a highly attractive business, with approximately 75% recurring revenues, mid-single digit organic growth and a solid margin profile. Its best-in-class technology, combined with the broadest, most technically-advanced solutions, make it the premier brand in the filtration industry," said Joyce.

The acquisition has been unanimously approved by the board of directors of each company, and the Pall board of directors has unanimously recommended that Pall shareholders approve the transaction. The transaction is expected to be completed around the end of calendar year 2015.