More IVD Consolidation as Danaher Buys Beckman

TODAY IT WAS ANNOUNCED that Danaher Corporation would acquire Beckman Coulter, Inc., in a transaction valued at $5.8 billion. The news was not a surprise, since word had leaked out last December that Beckman’s board of director had engaged Goldman Sachs to advise it about a potential sale.

For lab administrators and pathologists, the significance of this acquisition is that consolidation within the in vitro diagnostics (IVD) industry continues. Beckman Coulter was itself created from a series of acquisitions.

It was 1997 when Beckman purchased Coulter Corporation. (See TDR, October 6, 1997.) And it was in early 2009 when Beckman acquired the clinical diagnostics business of Olympus Corporation. (See TDR, March 16, 2009.)

For its part, Danaher has used acquisitions to build up its Medical Technologies Segment. This business division will report sales of about $4 billion for 2010 and includes revenue from three business areas: life sciences, diagnostics, and dental. Danaher lumps life sciences and diagnostics together.

At Beckman Coulter, clinical diagnostics represent 88% of the company’s total revenue and life sciences makes up the balance. Beckman will report sales of about $3.6 billion for 2010.

Thus, when Danaher combines the Beckman businesses with its existing life sciences and diagnostics companies, it will be one of the world’s largest manufacturers of products for both the life sciences and clinical diagnostics markets. Over the past several years, Danaher has shown a keen appetite to acquire firms with a strong technology base in molecular and genetic testing. On that count, Beckman Coulter should be a good fit.

Danaher’s acquisition of Beckman Coulter, like Beckman’s acquisition of the clinical diagnostics of Olympus in early 2009, demonstrates how quickly consolidation can change the competitive marketplace for laboratory analyzers and laboratory automation equipment. This has consequences for clinical laboratory managers and pathologists who want continuity in the IVD companies that manufacture and support the analytical systems used in their laboratories.

Consolidation in the IVD sector is likely to continue. Already some financial analysts predict that the Obamacare 2.3% medical device tax that takes effect in 2013 will pressure medical device and IVD manufacturers to cut costs. Implementation of that tax may trigger more IVD acquisitions.


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