Danaher Corporation, a USA science and technology company, today struck a deal to buy molecular diagnostics company Cepheid for $4 billion including debt, in order to boost its diagnostics business.
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The deal marks a 54% premium over Cepheid’s closing share price Friday, valuing the company at about $4 billion, including debt.
Cepheid, based in Sunnyvale, California, is a innovative global molecular diagnostics company that develops, manufactures, and markets accurate and easy to use molecular systems and tests.
Cepheid Chairman and CEO John Bishop said in a company release Tuesday that the buyout will allow the business to reach customers and patients faster than it could have on its own.
The deal is subject to customary closing conditions, including Cepheid-shareholder and regulatory approval, and is expected to close by the end of the year.
Danaher said the purchase will dilute GAAP diluted net earnings per share slightly in the first full-year but boost them on a non-GAAP basis by 5 cents, rising to 30 cents by year five.
The company’s GeneXpert systems enable genetic testing and provide test results for critical infectious disease, sexual health and virology, among other clinical applications.
Cepheid had sales of $539 million in 2015, and expects revenue of between $618 million and $635 million this year.
Danaher, which develops technology for the dental, life sciences, diagnostics and environmental industries, said the addition of Cepheid would improve operational efficiencies and expand margins in its US$5 billion diagnostics business.
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Cepheid (NASDAQ:CPHD) shares soared over 50% during premarket hours, after the company agreed to Danaher Corporation’s proposal.
