Washington, DC 9/6/16; Sunnyvale, CA 9/6/16–Technology provider Danaher has agreed to acquire publicly held Cepheid, a supplier of molecular diagnostics system, for $4 billion, including debt and net of acquired cash. This is equal to $53 per share in cash, a 54% premium to Cepheid’s closing price on September 2. Cepheid’s 2015 revenue totaled $539 million and is expected to reach $618-$635 million this year. “We expect Cepheid to be an excellent complement to our existing Diagnostics businesses and to expand our runway for growth across the platform,” commented Danaher President and CEO Thomas P. Joyce, Jr. “Cepheid’s extensive installed base, test menu and innovative product offering contribute to its market leadership in molecular diagnostics, and we expect it to strengthen our position in this high-growth segment.” In its first full year, the purchase is expected to be moderately dilutive to GAAP diluted net EPS and $0.05 accretive to non-GAAP, adjusted diluted net EPS. In the fifth year, it is expected to be $0.30 accretive to non-GAAP, adjusted diluted EPS. The transaction should close by the end of the year pending Cepheid shareholder approval and regulatory clearance.
Cepheid is a major provider of PCR systems and tests for molecular diagnostics, primarily the GeneXpert system. As Mr. Joyce commented on a conference call discussing the acquisition, the purchase increases Danaher’s molecular diagnostic offerings. In addition, he stated that it brings assay development expertise, access to underpenetrated markets, and greater exposure to the point-of-care and oncology markets. Danaher highlighted that the GeneXpert system is differentiated by its simplicity, rapid time to result, easy accommodation for more than 20 different tests, and ability to easily scale for any lab requirement. Danaher expects $100 million in annual cost synergies and revenue synergies each within five years of the acquisition’s closure.