Danaher Acquisition of Abcam All Set With $5.7 Billion Deal Agreed

Key takeaways

• Lab equipment specialist Danaher has agreed to acquire medical supplies company Abcam for $5.7 billion
• The price is a 40% premium on Abcam’s May share price, with the deal expected to complete in 2024
• Danaher shares are up 2%, but Abcam’s fell as much as 4.2% at the announcement

After beating out a host of other competitors, Danaher has emerged victorious from the bidding war to acquire life science company Abcam. The deal is worth $5.7 billion or $24 a share, though some investors think the buy-out could have gone more in Abcam’s favor. Let’s dive into the details.

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What’s the Danaher deal?

Having beaten out 20 other bidders, such as Agilent Technologies, Danaher will soon be the proud owner of medical supplies company Abcam (as long as it clears the usual regulatory hurdles). Abcam helps scientists with a suite of medical products they need to develop and test new drugs, which fits in with Danaher’s lab equipment and supplies niche.

Danaher is acquiring U.K.-based Abcam for $24 a share, which is a 40% premium on what Abcam’s share price was worth on May 16. Abcam is expected to operate as a standalone company under the Danaher Life Sciences segment. The deal is anticipated to close in mid-2024.

Of the deal, Danaher’s CEO, Rainer Blair, said “Abcam’s long track record of innovation, outstanding product quality and breadth of antibody portfolio positions them as a key partner for the scientific community”.

What was the market reaction?

Danaher shares were up as much as 1.7% at the news and have continued to climb, with 2% added to the stock since the announcement. The boost was much-needed as the stock has stayed largely flat this year, in line with the wider healthcare sector malaise on the markets.

Abcam investors, however, weren’t quite as pleased with the deal. Abcam’s share price opened on Monday as much as 4.2% lower than the previous week, suggesting Wall Street thought a better deal could have been made given the massive interest in acquiring the medical supplies distributor.

The bottom line

Subject to regulatory hurdles, it’s possible Danaher has gotten hold of Abcam for a steal given the potential boost to its business. The acquisition gives Danaher access to a whole new market where thousands of researchers rely on Abcam’s supplies, so the deal is pure upside from their perspective — even if Wall Street disagrees.

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