Danaher Identifies Products It Wants in X-Rite Buy

NEW YORK (TheStreet) -- Industrial conglomerate Danaher(DHR) is buying X-Rite(XRIT) for $5.55 a share or an enterprise value of roughly $625 million.

Danaher is buying X-Rite at a near 40% premium to Monday's closing price and will take in a specialty operation that has returned to profitability after reducing a heavy debt burden that weighed on earnings. With X-Rite, Danaher will get the company's Pantone brand, a leading manufacturer color systems that are key for printing companies, graphic designers, and photographers.

"We are excited about the opportunity to acquire two premier brands in X-Rite and Pantone," said William K. Daniel, executive v.p. of Danaher." If the deal closes, which Danaher expects to happen in the second quarter, X-Rite will operate as a stand-alone company within Danaher's product identification group and will retain its brands. The acquisition should also benefit Danaher's digital packaging unit, Esko.

"Along with Videojet and Esko, we believe X-Rite and Pantone will further Danaher's leading position in the product identification industry and present an attractive value creation opportunity."

The cash offer is subject to a tender offer, which Danaher said that 68% of X-Rite shareholders have already agreed to. According to Bloomberg compilations of Securities and Exchange Commission filings, X-Rite's largest shareholders are JPMorgan with a 39% stake and Sagard Capital with 15% of X-Rite's outstanding shares.