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A Look at Danaher’s Spin-Off of Its Dental Unit

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Sep. 26 2018, Updated 8:01 a.m. ET

Company overview

Danaher Corp. (DHR) provides equipment, consumables, spare parts, software licenses, and services. These consumables are ancillary to the equipment and are required on a recurring basis. Consumables include reagents for use in diagnostic tests, filters, and cartridges. Consumables also include dental implants and water treatment solutions.

The company’s geographic segments include North America, Western Europe, other developed markets, and high-growth markets that include developing markets.

In July, Danaher announced that it would spin off its Dental segment into a separate public company. Danaher expects to complete this separation by the second half of 2019. This transaction is expected to be tax-free for Danaher’s stockholders.

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Financials

Danaher Corp. (DHR) generated sales of $4.98 billion in the second quarter, compared to $4.51 billion in the second quarter of 2017. The company is expected to generate revenues of $19.83 billion in fiscal 2018 and $20.69 billion in fiscal 2019, compared to its revenues of $18.33 billion in fiscal 2017.

In the second quarter, Danaher’s recurring and non-recurring revenues reached $3.49 billion and $1.49 billion, respectively.

Segments

Danaher operates in four business segments: Life Sciences, Diagnostics, Dental, and Environmental and Applied Solutions. In the second quarter, revenues from these four segments totaled $1.6 billion, $1.55 billion, $733.4 million, and $1.09 billion, respectively. In comparison, revenues from these four segments during the second quarter of 2017 reached $1.38 billion, $1.44 billion, $702.6 million, and $983.2 million, respectively.

We’ll take a look at Danaher’s Dental segment’s financials and valuations in the next part.

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