Danaher Corp. DHR disclosed that its subsidiary DH Europe Finance S.A. is offering euro-denominated senior notes to partly fund the acquisition of Pall Corp. PLL. The company has announced the pricing of several senior notes to fulfill that purpose and expects to reap about €2.68 billion from them.
Danaher priced offerings of €500 million principal amount of floating rate senior notes at 100.000% of the principal amount; €600 million worth 1.000% senior notes at 99.696% of the principal amount; €800 million worth 1.700% senior notes at a price of 99.651% of the principal amount; and €800 million principal amount of 2.500% senior notes at 99.878% of the principal amount.
All these senior notes have due dates in 2017, 2019, 2022 and 2025. The offering is anticipated to complete on Jul 8, 2015. A consortium of financial giants is assisting Danaher in this offering as joint book-running managers such as Deutsche Bank AG DB, Merrill Lynch International and Morgan Stanley & Co. International plc of Morgan Stanley MS.
We expect this strategic move to improve the company’s liquidity position. Moreover, with Danaher's significant international presence, the multi-currency borrowing feature can help it to hedge the currency fluctuation risk to some extent. With its fruitful concerted efforts to curtail borrowing, the company’s long-term debt now stands at $3.1 billion as of Apr 03, 2015, which is lower than $3.4 million as on Dec 31, 2014.
As a matter of fact, in May 2015, Danaher penned a merger deal for the takeover of Pall Corp. for approximately $13.8 billion or $127.20 per share. The transaction is expected to close by the end of this year, subject to customary closing conditions. Upon transaction closure, Danaher expects the Pall buyout to be accretive by around 40 cents to non-GAAP, adjusted net earnings per share (excluding non-cash amortization, purchase accounting and transaction costs) for 2016.
After the completion of the merger, Danaher has planned to split itself into two independent, publicly traded companies. This major deal is expected to largely amplify this Zacks Rank #3 (Hold) stock’s proven management system and strong financial position.
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