- The Washington Times - Monday, June 20, 2005

Danaher Corp. yesterday further diversified its broad range of industrial products by acquiring dental-equipment maker Pelton & Crane for $85 million.

Pelton & Crane makes and sells dental lights, sterilizers, chairs and cabinets. The Charlotte, N.C., company reported revenues of about $80 million in 2004.

The acquisition adds to the medical equipment business that District-based Danaher began building early last year. Since then, Danaher has purchased companies that make dental drills, X-ray machines and in-vitro diagnostic tools.

The company’s diverse product line allows Danaher to benefit from various pockets of growth in the economy, said Richard Eastman, a senior analyst with Robert W. Baird & Co. in Milwaukee.

“Danaher has a history of putting a high value on scale and broad product lines, leveraging both distribution and manufacturing,” Mr. Eastman said.

Baird has set a target price of $69 for Danaher shares over the next 12 months.

Neither Mr. Eastman nor Baird own stock in Danaher, and Baird does not have a business relationship with the manufacturing company.

Danaher said it expects the acquisition to have a small impact on its earnings. Pelton & Crane’s $80 million in sales won’t add much to the $7 billion in revenue Danaher reported in 2004, noted Ivan Feinseth, managing director at Matrix USA in New York.

Matrix USA expects Danaher’s stock price to increase 10 percent to 15 percent over the next 12 months, said Mr. Feinseth, who does not own stock in Danaher. Matrix USA does not own Danaher stock nor does it have a business relationship with the company.

Shares of Danaher Corp. fell 15 cents yesterday to close at $54.75 on the Nasdaq Stock Market.

Mr. Feinseth said his only concern about Danaher is that manufacturers will suffer if the broader economy slows down. Sales of industrial and environmental products, such as Fluke electronic testing equipment and VideoJet product identifying equipment, account for about 80 percent of Danaher’s revenues. The other 20 percent of sales comes from tools and components, including brands such as Craftsman and Armstrong.

For its first quarter ended April 1, Danaher’s sales rose 18 percent to $1.83 billion, 13 percentage points of which came from acquisitions. First-quarter net income rose 29.6 percent to $1.88 million (58 cents per diluted share) from $1.45 million (45 cents) a year ago.

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