Danaher buying MDS, Life Technologies unit for $1.1 billion; 3,300 jobs, 30 plants to be shed

Danaher buying MDS, Life Technologies unit

NEW YORK — Danaher Corp., widely known for its Craftsman hand tools, on Wednesday unveiled a strategic expansion of its medical technology and professional instrumentation business, even as it shrinks other operations.

Danaher Corp. said it will buy a global provider of medical instruments to analyze molecules and shed about twice as many existing jobs and plants as previously announced.

Over the past year the Washington-based company’s industrial and tools segment has contributed a proportionately smaller part of total sales compared with its professional instrumentation and medical technology businesses.

In the year ended in July, sales from industrial technologies and tools and components, which includes Craftsman tools, fell to 33.7 percent from 36.4 percent of total sales a year earlier. Revenue from professional instrumentation and medical technologies jumped to 66.3 percent from 46.7 percent in the same period.

On Wednesday, Danaher said it will pay $1.1 billion, including debt, for two businesses, Applied Biosystems/MDS Sciex, a mass spectrometry business, plus a bioresearch and analytical instrumentation company owned by MDS Inc.

Mass spectrometry is a technique widely used in medical research for determining what elements make up a molecule.

MDS, based in Mississauga, Ontario, will distribute most of its sale proceeds to shareholders and then focus on radiotherapeutics and sterilization technologies. Carlsbad, Calif.-based Life Technologies Corp., which is a half owner of Applied Biosystems/MDS Sciex, will increase its focus on genomic medicine.

The amount of debt being assumed in the transactions, set for completion by the end of this year, was not immediately available.

Danaher will run the acquired businesses in its medical technologies segment, with yearly revenue rising by $650 million and earnings per share next year increasing by at least 5 cents per share.

Also Wednesday, the company virtually doubled the number of jobs and facilities it aims to shed. Danaher, which employs about 50,000 people, said it now aims to cut about 3,300 existing jobs and close 30 facilities.

The more severe layoffs and closures will boost restructuring charges to between $225 million and $250 million from an earlier projection of $150 million to $170 million, Danaher said. Savings are now estimated at $220 million per year.

Calls to Danaher about the reason for the increased layoffs and closures were not immediately returned.

Danaher shares rose $1.99, or 3.3 percent, to $62.41 in afternoon trading, while MDS jumped $1.69, or 29 percent, to $7.55 and Life Technologies added $1.03, or 2.3 percent, to $45.52.