Sector News

Pall, Maker Of Fluid-Filtration Systems, Nears Possible Sale

May 12, 2015
Chemical Value Chain
Pall Corp. is in the late stages of an auction that could value the maker of water-filtration and purification systems at well over $10 billion.
 
Potential buyers Danaher Corp. and Thermo Fisher Scientific Inc. are vying for Pall, with final bids due this week, people familiar with the matter said.
 
The exact price the company could fetch couldn’t be learned, and the talks may not lead to a deal.
 
Pall, based in Port Washington, N.Y., had a market value as of Monday’s close of $10.6 billion, and given prices typically paid in takeovers, a deal could value the company at roughly $13 billion or more.
 
Pall stock already had risen 19% over the past year on a series of strong earnings reports, and hit an all-time high of $105.02 earlier this year, according to FactSet. The shares closed Monday at $99.31, down slightly, but rose 19% after hours following a Wall Street Journal report on the talks.
 
Pall sells its purification and filtration products to a wide range of customers including biopharmaceutical companies, airplane manufacturers, brewers and municipal water suppliers. It had revenue of $2.8 billion last year, up 5% from 2013, according to securities filings.
 
Pall traces its roots to 1946, when Dr. David Pall founded Micro Metallic Corp. in his garage, according to a company history. It changed its name in 1957 and soon became a supplier of hydraulic filters to Boeing Co. planes.
 
Today, its revenue is roughly split between an industrial division, whose revenue has been declining, and a faster-growing life-sciences division, which makes laboratory products such as syringe filters and petri dishes.
 
Pall would be Danaher’s largest takeover to date, surpassing the $5.9 billion it paid in 2011 for Beckman Coulter Inc., according to S&P Capital IQ. Danaher has a market capitalization of $59 billion, and had $2.5 billion in cash and equivalents as of April 3, according to a securities filing.
 
Danaher has been outbid in big takeover auctions of late, such as those of Ashland Inc.’s water-technology unit and Johnson & Johnson’s diagnostics business. It teamed up on those bids with private-equity firm Blackstone Group LP, which isn’t involved in its effort to acquire Pall, according to a person familiar with the matter.
 
Thermo Fisher, which has a market value of $52 billion, has stuck with smaller acquisitions since buying lab-equipment maker Life Technologies Inc. last year for $13.6 billion.
 
About 39% of Thermo Fisher’s 2014 revenue came from lab products and services, a segment that includes filtration systems to keep solutions sterile.
 
By Liz Hoffman 
 

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