Medical Device Manufacturing Giant Danaher Pockets Flourishing CDMO in $9.6B Buy

On June 17th, Danaher Corporation announced that it has entered a definitive agreement discussion to acquire a flourishing North Dakota-based CDMO, Aldevron for approximately $9.6 billion. Aldevron is a privately held company that manufactures biologic products for biotechnology and pharmaceutical companies, including Moderna. Following the announcement, Danaher’s stock grew 5% to $257.08.

“We are thrilled to have Aldevron join Danaher’s Life Sciences segment,” said Rainer M. Blair, President, and CEO of Danaher. “For nearly 25 years, Aldevron has made tremendous contributions to the advancement of cell, gene, and other novel therapies and vaccines. This acquisition will expand our capabilities into the important field of genomic medicine and help us support our customers and their critical mission to bring more life-saving therapies and vaccines to market faster.”

A Leader in Life Science Tools Market

The global life science tools market size surpassed 49.8 billion dollars in 2019 and is expected to grow at a CARG of 8.5% from 2020 to 2028. It is a broad branch of science that develops reagents, consumables, instruments, and various other services. Along with other major leaders like Thermo Fisher Scientific, and AgilentTechnologies, the market is dominated by Danaher.

Headquartered in Washington, Danaher designs manufactures and markets professional, medical, industrial, and commercial products and services. They operate within three different sectors; Environmental and Applied Solutions, Life Sciences, and Diagnostics.

Danaher has acquired hundreds of businesses since 1984, which have been the driving force behind the company’s sustained growth. In 2019, it acquired the biopharma business of GE Life Sciences (“GE Biopharma”) for a whopping $ 21.4 billion in cash to form Cytiva.

The medical device manufacturing giant has more than 20 operating sites with around 69,000 employees globally. In the first quarter of 2021, the company acquired net earnings of $1.7 billion, which represents a 182.5% year-over-year increase from the comparable 2020 period. It also reported a 58% year-over-year revenue increase to $6.9 billion.

Details of Alvedron Acquisition

Aldevron was founded in 1998 by Micheal Chambers and John Ballantyne in a small lab at North Dakota State University (NDSU). Currently, it employs around 600 people and specializes in manufacturing high-quality biologics including, plasmid DNA, proteins, enzymes, and antibodies. The company also provides storage and distribution services for its clients in the United States and Europe.

As per the acquisition terms, Danaher intends on paying the purchase price of $9.6 billion with cash on hand and funds raised through commercial paper. The completion of the transaction is subject to the receipt of regulatory approvals and satisfaction of other customary closing conditions. Aldevron will be integrated into Danaher’s Life Sciences segment but will operate as a stand-alone company.

“Joining Danaher will help us expand our global reach and harness the power of the Danaher Business System to continue supporting our customers with best-in-class products and services,” said Michael Chambers, who is now the Founder and Executive Chairman of Alvedron. I’m incredibly excited for Aldevron to take this pivotal next step with Danaher and look forward to the tremendous impact we can make together in the expanding area of genomic medicine.”

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Author

Nicole Bata