Toolmaker to Acquire Sybron Dental Specialties
Drilling deeper into the dental-equipment business, toolmaker Danaher Corp. said Wednesday that it would buy Newport Beach-based Sybron Dental Specialties Inc. for about $2 billion.
The deal would allow Washington-based Danaher, a fast-growing industrial conglomerate better known for making electronic testing devices and hand tools, to expand its dental business.
“We believe that an aging global population, combined with people’s desire to retain their natural teeth, will continue to drive long-term opportunities,” Danaher’s president and chief executive, H. Lawrence Culp Jr., said in a conference call with analysts.
Growth prospects are strong in the market for dental “consumables,” such as implants, fillings and crowns, Culp said. Sybron Dental makes those products as well as other equipment and supplies for dentists. The company has about 4,200 employees worldwide, including 1,000 in Riverside and Orange counties.
Danaher, which began acquiring dental equipment manufacturers two years ago, will offer $47 in cash for each Sybron share beginning next week, company executives said -- representing a 13% premium over Tuesday’s closing share price. Under terms of the deal, Danaher also would assume about $200 million in Sybron debt.
Investors reacted positively. Sybron’s shares jumped $5.07, or 12%, to $46.81. Danaher’s shares rose 60 cents to $69.95. The companies expect the deal to be completed this year.
Frank H. Pinkerton, an analyst with Banc of America Securities, told investors in a note that the deal should be good for both companies.
“Danaher is leveraging its dental equipment footprint by moving into the consumable market,” Pinkerton wrote. And “Sybron should benefit from being part of a larger corporate entity.”
Danaher makes dental equipment such as X-ray machines, chairs and surgical tools. The company, which began in the early 1980s and has been on an acquisition spree in recent years, earned $898 million on $7.9 billion in sales last year.
The acquisition would give Danaher, which has 40,000 employees, a more “balanced dental portfolio,” Culp said.
It also would allow the company to exploit Sybron’s international network. About 45% of Sybron’s sales are outside North America.
Nearly all of Sybron’s business is in products that end up in patients’ mouths, such as fillings, crowns and titanium implants, accounting for 97% of its $650 million in sales in its last fiscal year. The company earned $77 million last year.
Sybron Dental was spun off in 2000 from Sybron International Corp., a maker of laboratory and dental products, said Bernard J. Pitz, the company’s chief financial officer.
Sybron Dental continued to acquire other companies including, most recently, privately held Dental Disposables International Inc., a maker of materials for preventing infections in dental offices.
Pitz said Sybron’s acquisition underscored ongoing consolidation in a dental products market that has been dominated by small manufacturers.
