Danaher Corp (DHR.N) said it will buy Iris International Inc IRIS.O for about $355 million, as the industrial and medical conglomerate looks to expand its position in the medical diagnostics business.
An ageing population, increased preventive healthcare and the opportunity presented by U.S. healthcare reforms are attracting investors to the diagnostics sector.
Danaher completed its $5.8 billion purchase of U.S. medical diagnostics company Beckman Coulter last year. The deal helped double second-quarter sales in Danaher's life sciences and diagnostics segment, which serves hospitals and labs.
Danaher has been aggressive on acquisitions and has made at least eight buyouts since the start of the year, spending almost $1 billion. It said it could spend $5 billion on mergers and acquisitions over the next two years.
After the Beckman deal, Danaher's biggest-ever, many analysts and investors expected future deals to focus more on the conglomerate's industrial businesses. Monday's Iris deal, however, moves Danaher further into the medical diagnostics market.
Several large deals have been struck in the medical diagnostics sector this year, including Agilent Technologies Inc's (A.N) $2.2 billion takeover of Danish cancer diagnostics firm Dako and Hologic Inc's (HOLX.O) $3.75 billion acquisition of Gen-Probe Inc.
Danaher will pay $19.50 in cash for each Iris share, a 45.3 percent premium to the stock's Friday close. The company, which makes tests to analyze urine and blood, will become part of Danaher's Beckman Coulter Diagnostics.
Iris posted revenue of about $118.3 million in 2011, and is expected to report a 9 percent jump in 2012 revenue.
Danaher said the deal value comes to about $338 million, including IRIS' debt and net cash acquired.
The deal is expected to close in the fourth quarter.
Danaher shares were flat at $54.78 on Monday on the New York Stock Exchange. Iris shares were up 45 percent at $19.48 on the Nasdaq.
(Reporting by Megha Mandavia in Bangalore; Editing by Saumyadeb Chakrabarty)