Danaher Nears $9.9 Billion Acquisition of Masimo Corp.
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 4 days ago
0mins
Should l Buy DHR?
Source: Benzinga
- Acquisition Progress: Danaher is reportedly nearing a $9.9 billion acquisition of Masimo, representing a notable premium over Masimo's nearly $7 billion market cap, with an announcement expected as early as Tuesday, barring any last-minute complications.
- Governance Changes Context: This acquisition follows significant governance changes at Masimo driven by activist investors, leading to the removal of founder Joe Kiani as board chair, who retains about a 5% stake, highlighting the strong influence of investors on corporate strategy.
- Financial Performance Comparison: Danaher reported fourth-quarter 2025 sales of $6.84 billion, up 4.5% year-over-year and beating market expectations, while Masimo anticipates fiscal 2025 sales of approximately $1.523 billion, indicating a disparity in market performance between the two companies.
- Market Reaction: Following the acquisition news, Danaher's shares fell 5.22% in premarket trading, while Masimo's shares surged 34.51%, reflecting differing market expectations regarding the potential impact of the acquisition.
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Analyst Views on DHR
Wall Street analysts forecast DHR stock price to rise
18 Analyst Rating
17 Buy
1 Hold
0 Sell
Strong Buy
Current: 211.250
Low
240.00
Averages
266.18
High
310.00
Current: 211.250
Low
240.00
Averages
266.18
High
310.00
About DHR
Danaher Corporation is a global life sciences and diagnostics innovator. The Company operates through three segments: Biotechnology, Life Sciences and Diagnostics. The Biotechnology segment includes the bioprocessing and discovery and medical businesses and offers a broad range of equipment, consumables and services that are primarily used by customers to advance and accelerate the research, development, manufacture and delivery of biological medicines. The Life Sciences segment offers a broad range of instruments, consumables, services and software that are primarily used by customers to study the basic building blocks of life, including deoxyribonucleic acid (DNA) and ribonucleic acid (RNA), nucleic acid, proteins, metabolites and cells. The Diagnostics segment offers clinical instruments, consumables, software and services that hospitals, physicians’ offices, reference laboratories and other critical care settings use to diagnose disease and make treatment decisions.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- RingCentral Strong Earnings: RingCentral's stock jumped over 32% after its latest earnings release, reporting Q4 EPS of $1.18, exceeding the analyst estimate of $1.14, with revenue of $644 million meeting expectations, showcasing the company's ongoing efforts in innovation and product launches.
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- Tech Stock Sell-off: A wave of selling in technology shares is occurring as investors express uncertainty about their future value, particularly as price-to-earnings ratios shrink dramatically, which negatively impacts overall investment sentiment.
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- CrowdStrike-Microsoft Partnership: CrowdStrike's Falcon platform is now available on the Microsoft Marketplace, which could significantly boost revenue; however, its current P/E ratio of 85 has led to a tepid market reaction, reflecting investor anxiety over high valuations.
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- Transaction Background: The deal follows a proxy contest led by activist hedge fund Politan Capital Management, resulting in the removal of Masimo founder Joe Kiani as board chair, who subsequently stepped down as CEO but retains about a 5% stake, indicating significant governance changes.
- Valuation Metrics: The transaction is valued at approximately 18x estimated 2027 EBITDA, or 15x including expected annual synergies, reflecting Danaher's confidence in Masimo's future profitability and potential growth in the diagnostics sector.
- Financial Expectations: Danaher anticipates Masimo will generate over $530 million in EBITDA by 2027, with more than $125 million in annual cost synergies and over $50 million in annual revenue synergies expected by the fifth year post-acquisition, showcasing a strong financial outlook.
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- Danaher Reduction: Selling 200 shares of Danaher at around $207 each decreases the weighting from 2.1% to 1.05%, realizing a disappointing 9% loss, reflecting concerns over its acquisition of pulse oximetry leader Masimo and a preference for biotech-focused acquisitions.
- Texas Roadhouse Sale: Offloading 200 shares of Texas Roadhouse at about $189 each reduces the weighting to 0.95% from 1.9%, achieving an 8% gain, yet concerns over persistent beef inflation suggest potential earnings misses in upcoming reports.
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