Citi Comments On Danaher Corporation Following Beckman Coulter Acquisition

Buy-rated Danaher's DHR agreement to acquire Beckman Coulter BEC for $6.8 bil culminated a two-month public process with what Citi considers to be an immediately accretive transaction with ample upside to profitability and synergy targets. Key deal metrics of 1.8x trailing sales and 8.2x EBITDA look reasonable based on Danaher's historical deal multiples and the med-tech peer group. The 30c accretion guidance on 2012 implies a more substantial share price reaction, which Citi expects to see over the near term. It still sees further catalysts ahead for Danaher including updates on synergy expectations, bolt-ons deals, and operating upside from the core businesses. Citi does not intend to add Beckman to its model until the deal closes, and is maintaining its estimates, $57 price target, and reiterate its Buy rating. DHR is trading higher at $50.32