By Stuart Biggs and Miquéla V Thornton | Bloomberg
Irvine-based Masimo is being acquired by Danaher Corp. in a deal with an enterprise value of about $9.9 billion, allowing it to gain a foothold in the medical supply business.
Danaher will pay $180 per share in cash for Masimo, close to a 40% premium over the closing share price on Friday, according to a statement Tuesday. The transaction is expected to be completed in the second half of the year.
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Shares of Masimo rose as much as 35% when markets opened in New York. They dropped 28% over the past 12 months through Friday’s close. Danaher fell as much as 5.5%.
Masimo is known for patient monitoring technologies, such as pulse oximeters that measure blood oxygen levels. Analysts expect the patient-monitoring device market to grow at a high single-digit to low double-digit pace through the early 2030s, driven by aging populations and rising rates of chronic disease.
Danaher develops products used in biotechnology, life sciences and diagnostics — a relatively stable part of the overall health-care industry. Its businesses include Beckman Coulter in Brea, Cepheid in Sunnyvale and Massachusetts-based Cytiva, the former GE Healthcare Life Sciences unit it bought for $21 billion in 2020.
The company is known for growing through regular acquisitions — “hundreds over the past 40+ years,” according to BTIG analyst Marie Thibault. Investors were anticipating a new, large Danaher deal because it hadn’t done one in a while and buying into a market where it doesn’t have much of a business raises fewer antitrust concerns, Bloomberg Intelligence analyst Jean-Yves Coupin said.
“Danaher’s interest in Masimo’s market-leading patient monitoring technology is understandable,” Stifel analyst Rick Wise said. “To us, the Danaher acquisition makes a lot of strategic sense for Masimo and its relevant stakeholders.”
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Danaher still has room for another $5 billion to $10 billion acquisition by the end of the year if it chooses, Yves-Coupin said.
Masimo has been involved in a long-running battle with Apple Inc. over health-tracking, including a years-long legal fight over the blood oxygen monitoring feature on Apple’s smartwatch in the US.
In November, a California federal jury awarded Masimo $634 million after finding that Apple Watch’s heart-rate alerts infringed one of its patents.