Danaher's Strategic Abcam Deal Boosts Growth at a Reasonable Price: Analyst

Monday, Danaher Corporation DHR had agreed to acquire Abcam plc ABCM for $24.00 per share in cash, or a total enterprise value of ~$5.7 billion, including assumed indebtedness and net of acquired cash.

The transaction is anticipated to close in mid-2024 and will be funded using cash on hand and proceeds from the issuance of commercial paper.

William Blair analysts Matt Larew, Sam Martin, and Madeline Mollman say that the alignment between Abcam and Danaher appears to be well-suited in terms of financial considerations, promoting growth and bolstering margins. 

This acquisition offers Danaher an avenue to penetrate the proteomics reagents market, a domain where key players such as Thermo Fisher Scientific Inc TMO and Merck Millipore have already established strong positions.

Danaher's strategic move places it at the forefront of the antibodies sector, especially within research-use-only (RUO) antibodies, where Abcam is the undisputed leader, the analyst notes.

The analyst perceives the Abcam acquisition as a step that won't impede other potential mergers and acquisitions in Danaher's trajectory.

The timing is also a positive given that Abcam is emerging from a multiyear investment period, and profitability in recent periods has begun to improve meaningfully.

Price Action: DHR shares are up 0.91% at $263.89 on the last check Tuesday.