- The Washington Times - Monday, November 24, 2003

Danaher Corp. added a key piece to one of its growing business platforms last week when it bought Accu-Sort Systems Inc.

Washington-based Danaher, which makes tools and environmental testing systems, said it will integrate Accu-Sort, a Telford, Pa., company into its Product Identification Business Group. Danaher paid $63 million for the maker of bar-code scanners.

Shares of Danaher rose 12 cents yesterday to close at 82.07 on the New York Stock Exchange.

Analysts said the Accu-Sort acquisition is unlikely to affect Danaher’s stock price immediately, but should help the company expand its ability to offer product identification services, such as “born-on” dating on soda cans.

“This demonstrates their commitment to grow this platform,” said Keiran Hurson, an analyst with Midwest Research, who does not own Danaher stock.

The company’s expansion into product identification began with the $400 million purchase of VideoJet, also known as Marconi Data Systems, in January 2002. Danaher also bought Willett International, an industrial ink-jet-printing company, last November. The company has spent nearly $1 billion in acquisitions in the past two years.

Danaher reported third-quarter earnings of $138.6 million, or 87 cents per share, compared with $116 million, or 74 cents per share, during the third quarter of 2002. Its sales rose from $1.15 billion to $1.31 billion in the same period.

Analysts attribute much of Danaher’s success to the company’s management, which they say weeds out inefficiency and extra costs.

Danaher’s pace of acquisitions slowed this year. Some analysts said this could lead to slower earnings growth in 2004. Some cautioned that Danaher should boost revenue from its core businesses.

Nicholas Heymann, an analyst with Prudential Equity in New York, said in a recent report that Danaher could see sluggish growth in its waste-treatment business, because many state and local municipalities face budget constraints.

But for the most part, analysts consider Danaher to be one of the most stable and well-run firms in the S&P; 500, and expect it to reap big rewards if the economy improves.

“I expect they will benefit from a general pickup in industrial spending,” said Brian Langenberg, principal at Langenberg and Co. in Chicago, who does not own Danaher shares.

Shares of Danaher are among the highest-priced of all companies in the manufacturing sector, having grown by more than 21 percent this year. Shares reached a 52-week high of $85.20 on Nov. 6, but have fallen back slightly.

“There’s no particular reason for a sell-off,” Mr. Hurson said. “Danaher is perceived as a relatively safe play. You may get some people getting out of Danaher to get into something riskier.”


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