Each year since 2005, IBO has selected a firm from our industry as “company of the year.” This designation is based on IBO’s recognition that the selected analytical instrument maker has accomplished significant technical, operational and financial achievements during that year. Such achievements are measured by financial performance, market leadership, product introductions and key strategic investments.

IBO’s 2011 company of the year is Danaher, a diversified organization with significant involvement in the life science and environmental markets. Our focus, therefore, is on the performance of its two most relevant business groups, Life Science and Diagnostics, and Environmental, although some activities within those groups fall outside the categories that make up IBO’s definition of the life science and analytical industry.

Over the course of the last decade, Danaher has grown from a tiny analytical and life science instrument industry participant to a member of the top five industry companies, with particular movement in 2010 and 2011. Much of this growth has been accomplished through an aggressive acquisition program that has added industry leaders such as AB SCIEX, Molecular Devices (see IBO 9/15/09), Leica Microsystems (see IBO 7/15/05) and, most recently, Beckman Coulter (see IBO 2/15/11). Along with Hach, a leader in laboratory and process water analysis, Danaher’s 2011 revenues in the analytical and life science instrument market will approach $3 billion.

Danaher has judiciously targeted strong performers in attractive markets whose future results would be enhanced through the application of the customized Danaher Business System. This strategy has led to significant top line growth and operating income expansion for those acquired entities.

Danaher has been particularly successful in integrating acquisitions into the overall Danaher corporate culture, while simultaneously maintaining the unit and brand identities as separate organizations. Although many of its acquisitions have been of modest size, no other competitor has been able to bring as many large-sized organizations into the fold with apparent ease, while also improving those businesses’ market share positions.

Operating profits of existing and acquired businesses have likewise held steady or improved during organizational transitions and in spite of macroeconomic volatility. Because the financial reporting segments of Danaher include the businesses of interest as well as other businesses, it is not possible to assess the exact level of profitability of the analytical instrument businesses. However, the trends strongly suggest that Danaher does extremely well in our areas of interest.

Danaher is also committed to new product development and has maintained and expanded the flow of new products across its life science and environmental instrumentation businesses, while making the necessary structural changes consistent with the competitive and economic environments. AB SCIEX’s introduction of the Q-TOF 5600 mass spectrometer (see IBO 5/31/10) is a good example of product development efforts that have paid off.

Danaher’s stated core values, focused on team building, customer sensitivity, continuous improvement and innovation have propelled it into a leading position in our industry, making it a force to contend with now and in the years to come.