Danaher Acquisitions

Extracts from JimPinto.com eNews dated 10 March '00 and 17 March '00

Danaher Acquires Two More

(Announced in JimPinto.com eNews dated March 10, '00)

Danaher is buying Kollmorgen for $324 million and the motion control business of Warner Electric for $144 million. Still more fuel for growth for Danaher, which is aggressive and hungry to get to the next level.

Danaher Acquisition - what next ?

Following news of the two Danaher acquisitions, a JimPinto.com subscriber asked :

    "With all the recent acquisitions made by the Danaher Corporation, how do you see them handling the overlap of products and technology, especially Kollmorgen, Pac Sci, API, Warner, Atlas Copco? Do you believe there will be a considerable amount of consolidation? As I can see, the recent acquisitions of Kollmorgen and Warner appears to be a way for Danaher to gain market share and expand their distribution network, more than gain new technology."

Here is my response :

You're right on - these acquisitions are "to gain market share and expand distribution" - not for new technology. Danaher is a Manufacturing-orientated organization, and they'll provide manufacturing quality and cost improvements. In my opinion, the overlaps will be measured, and simply consolidated or divested.

In a relatively flat marketplace, the name of the game for the big names, with their stock traded on a major exchange, is to grow through acquisition, without diluting profit percentage.

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