Danaher 2009 Annual Report Download - page 32

Table of Contents
Acquisitions
The Company acquired fifteen businesses during 2009 for consideration of approximately $704 million in cash, net of cash acquired. These businesses were
acquired to complement existing units of the Medical Technologies, Professional Instrumentation and Industrial Technologies segments. The aggregate annual
sales of these fifteen acquired businesses at the time of their respective acquisitions, in each case based on the company’s revenues for its last completed fiscal
year prior to the acquisition, were approximately $430 million.
Subsequent to December 31, 2009, the Company completed the previously announced acquisition of the Analytical Technologies division of MDS, which
includes a 50% ownership position in the Applied Biosystems/MDS Sciex joint venture (“AB SCIEX”), a mass spectrometry business, and a 100%
ownership position in the Molecular Devices Corporation, a bioresearch and analytical instrumentation company. In a separate, but related transaction, the
Company simultaneously completed the acquisition of the remaining 50% ownership position in AB SCIEX from Life Technologies Corporation. The
aggregate purchase price for the combined transactions was $1.1 billion, including debt assumed and net of cash acquired. AB SCIEX and Molecular Devices
Corporation now operate within the Company’s Medical Technologies segment, and are expected to increase the Medical Technologies segment’s annual
revenues by approximately $650 million. The acquisition of AB SCIEX significantly expands the Company’s position in the life sciences and diagnostics
business and in particular establishes a position in the mass spectrometry market. AB SCIEX is expected to provide additional sales and earnings growth
opportunities in the Company’s Medical Technologies segment, both through the growth of existing products and services and through the potential acquisition
of complementary businesses. Company management and other personnel are devoting significant resources to the successful integration of the acquired
businesses into Danaher.
Settlement of Litigation
During the third quarter of 2009, Ormco Corporation, a wholly-owned subsidiary of the Company, settled certain litigation pending between Ormco and Align
Technology, Inc. (Align). Among other provisions, as part of the settlement, Align paid $13 million in cash to Ormco and issued to the Company 7.6 million
shares of Align common stock which, following issuance, represented an approximately ten percent ownership interest in Align. The Company recorded a pre-
tax gain of $85 million ($53 million after tax or $0.16 per share) related to the settlement representing the cash received and the value of the shares received on
the date the shares were issued to the Company, net of $13 million of related legal and direct settlement costs incurred. This gain is reflected as “other (income)
expense” in the accompanying Consolidated Statement of Earnings.
Restructuring Activities
During 2009, the Company recorded pre-tax restructuring and other related charges totaling $238.5 million. Of the total 2009 restructuring costs incurred,
$192.3 million ($144.4 million net of tax or $0.43 per diluted share) was incurred pursuant to plans approved by the Company in April and August of 2009
and $46.2 million was incurred in connection with the Company’s normal on-going restructuring actions. The plans approved by the Company in April and
August 2009 reflected management’s assessment that adjustments to the Company’s on-going cost structure were appropriate in light of lower demand in most
of the Company’s end markets resulting from the overall deterioration in global economic conditions that began in the latter half of 2008 and continued through
2009. These 2009 restructuring actions include employee-related and facility shut-down costs of $228.1 million and non-cash asset write-offs of $10.4
million. Cash expenditures for these restructuring activities are being funded with cash generated from operations. As of December 31, 2009, cash payments of
$106.5 million related to these actions have been made. The Company’s 2009 restructuring activities generated approximately $50 million pre-tax savings
during 2009 and the Company expects to realize approximately $170 million of incremental year-over-year pre-tax savings during 2010 associated with these
restructuring activities.
During the fourth quarter of 2008, the Company recorded pre-tax restructuring and other related charges totaling $82.0 million ($61.5 million net of tax, or
$0.18 per diluted share) relating to restructuring actions designed to better position the Company’s cost base in light of the deterioration in global economic
conditions. These charges included
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Source: DANAHER CORP /DE/, 10-K, February 24, 2010 Powered by Morningstar® Document Research℠
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