Danaher 2009 Annual Report Download - page 50

Table of Contents
Investing Activities
Cash flows relating to investing activities consist primarily of cash used for acquisitions and capital expenditures and cash flows from divestitures of
businesses or assets. Net cash used in investing activities was $943 million during 2009 compared to $567 million of net cash used in 2008. Gross capital
spending of $189 million during 2009 was approximately $5 million less than gross capital spending during 2008. Capital expenditures are made primarily
for increasing capacity, replacing equipment, supporting new product development and improving information technology systems. In 2010, the Company
expects capital spending to approximate $225 million, though actual expenditures will ultimately depend on business conditions.
Net cash used in investing activities related to continuing operations was approximately $567 million in 2008 compared to approximately $3.4 billion in 2007.
Gross capital spending increased $32 million in 2008 from 2007 levels to $194 million.
As discussed below, the Company completed numerous business acquisitions and divestitures during 2009, 2008 and 2007. All of the acquisitions during
this period have resulted in the recognition of goodwill in the Company’s financial statements. This goodwill typically arises because the purchase prices for
these businesses reflect a number of factors including the future earnings and cash flow potential of these businesses; the multiple to earnings, cash flow and
other factors at which similar businesses have been purchased by other acquirers; the competitive nature of the process by which the Company acquired the
business; and the complementary strategic fit and resulting synergies these businesses bring to existing operations. For a discussion of other factors resulting
in the recognition of goodwill see Notes 2 and 6 to the accompanying Consolidated Financial Statements.
2009 Acquisitions/Divestitures
The Company acquired fifteen businesses during 2009 for consideration of approximately $704 million in cash, net of cash acquired. Each company
acquired manufactures products and/or provides services in the life sciences, dental, product identification, environmental or test and measurement markets.
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.
In addition, during 2009 the Company divested five businesses or product lines for approximately $10 million of net cash proceeds. The divested businesses
were part of the Industrial Technologies and Tools and Components segments and had aggregate annual revenues of approximately $53 million in 2009. The
Company recorded no significant gain or loss, either individually or in the aggregate, associated with these divestitures. The Company is using the proceeds
from these sales for general corporate purposes.
2008 Acquisitions
The Company acquired seventeen companies or product lines during 2008 for consideration of approximately $423 million in cash, including transaction
costs and net of cash acquired and $8 million of debt assumed. Each company acquired manufactures products and/or provides services in the life sciences,
dental, product identification, environmental or test and measurement markets. These companies were acquired to complement existing units of the Medical
Technologies, Industrial Technologies or Professional Instrumentation segments. The aggregate annual sales of these seventeen 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
$325 million.
2007 Acquisitions/Divestitures
In November 2007, the Company acquired all of the outstanding shares of Tektronix, Inc. for total cash consideration of approximately $2.8 billion,
including transaction costs and net of cash and debt acquired. The Company initially financed the acquisition of Tektronix through the issuance of
commercial paper and available cash (including proceeds from the underwritten public offering of 6.9 million shares of Danaher common stock completed on
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Source: DANAHER CORP /DE/, 10-K, February 24, 2010 Powered by Morningstar® Document Research℠
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