Wednesday, October 17, 2007

Danaher to buy Tektronix We've often pointed out that there are few successful conglomerates whose interests are spread into a wide variety of different fields. General Electric is a big exception, and Danaher Corporation may be another. The US-based manufacturer has its fingers in a number different industries, mostly centered around instrumentation and tools. Danaher announced this week that it would buy US test and measurement company Tektronix. Tektronix, is a venerable name in the US electronics industry, was founded in 1946. The company, which one made one of the earliest computer terminals and sold its office printer division to Xerox in 1999, makes machines like oscilloscopes and logic analyzers. Its devices are used to test and diagnose electronic devices from semiconductors to TV monitors. It is also used by telecom companies. The deal, Danaher's largest ever, is for $2.6 billion. That's a big sum for a company whose current revenue is $9.6 billion. One advantage, according to Bloomberg News, is Tektronix's extensive position in Asia, an area that Danaher needs to grow in. Danaher is not a company most consumers will have heard of. The company is the maker of Sears Craftsman tools, but most of its other products are used by other manufacturers and industries. With over 70 brands, including many originating in Europe, Danaher looks pretty chaotic. But there are several specializations that stand out form the chart below. First, there's the company's main business in a wide variety of industrial controls: sensors, regulators, and measuring equipment, used mostly in manufacturing, but also in the oil and chemical industries. This is where the Tektronix buy fits in. Second, specialized motors and motor systems that allow for precise movement, used in a variety of equipment where there is little margin for error in positioning response (think dental equipment, for example). Third, dental equipment. The company has become the biggest supplier of all kinds of machinery and equipment used in dental offices. Fourth, bar coding equipment, where the company has become a world leader. Fifth, it is a leader in the making of hand tools, both for consumers and professionals, and especially tools for auto repair. Sixth, it is using its process measurement expertise to provide equipment for the water and sewage treatment industries. Finally, defense equipment, usually involving motors or safety systems. The company, needless to say, has been an aggressive acquirer in all of those fields, Last year Danaher acquired Sybron Dental Specialties Inc., a maker of dental equipment, in a $2 billion deal. It also acquired 10 other firms. This year it has already bough four, including $435 million purchase of Chemtreat, a water treatment company. Looking at the list below, I am struck at the immense size of the below-the-surface technology. Aside from sitting in a dentist seat or wielding a drill, I doubt I've ever been in the same room as most of these products and I only vaguely understand any of them. And most of these brands have dozens of SKUs, fitting the product to a wide variety of industrial uses. Danaher is a company that runs beneath the notice of the business press and the public but it has amassed a commanding position in a number of specific area that are crucial to the economy, and in which it is building up global reach. But ione thing is almost certain. The company is worth far more up cut into specific, speclized pieces than it i a whole. At some point, that has to become a centrifugal factor. Danaher brands Brand Products  Notes Aaliant Flow meters User in industries form petroochemicals to food and beverage Accu-Sort Laser and CCD scanners Used by FedEx, UPS, and the US Post Office Allen Hand tools Retail ALL TEC Bar coders   Ameriican Sigma Flow guages and water sampling equipment Buyers include water utilities Anderson Sanitary process instrumentation SSells to food & beverage, and pharmaceutical industries Armstrong Tools Hand tools Industrial Artus Engines and power sources For aerospace and defense Bindicator Industrial sensors Used for measuring dry bulk products Bühler Montec Wastewater monitoring equipmen Used by watewater treatment plants; based in Germany Calzoni Hydraulic systems Defense uses; based in Italy ChemTreat Water treatment equipment   Delta Metal storage units For trucks, workshops DEXIS Digital X-ray equipment Dentists DH Instruments Gas flow calibration Chemical industry Dover Instrument Precision air-bearing systems Used in precisely controlling movement of various equipment Dynapar Motion feedback controls Used in precisely controlling movement of various equipment Eagle-Signal Timers and counters Used in manufacturing ELE Construction materials testing and environmental instrumentation Based in UK; world leader Electro Kinetics Custom alternators and generators Defense applications Energy Dynamic Energy systems Defense, aerospace Environmental Test Systems Chemical test systems   Fluke Electronic test tools For networks and medical applications, among others GearWrench Hand tools   Gems Sensons Liquid pressure and flow sensors   Gendex Dental imaging machines (like X-ray machines)   Gilbarco Fuel dispension systems Oil industry GLI Liquid sensors and gauges   Guardian Voting machines   Hach Water quality testing equipment   Harowe Motor feedback systems   Hart Scientific Temperature measurement systems Meteorology, manufacturing HECON Ink jet printers Used in ATMs, parking systems, transit ticketing, and so on Hengstler Industrial counters Based in Germany Hennessy Industries Automotive tools Used for tire balancing HoloKrome Hand tools Retail HTL Fire safety equipment, high-pressure valves   Hydrolab Water monitoring instrumentation   Imaging Sciences International DEntal imaging equipment   Invetech Consulting servcice for inventors to bring products to market Located in Australia ISELI Precision screws and cams   Jacobs Drill chucks, diesel engine components   Joslyn Clark Controls Pump controllers   KaVo Dental instruments Located in Germany K-D Tools Hand tools   Kerr Dental equipment   Kistler-Morse Weight and measurement equipment Bulk manufacturing Kollmorgen Small motors For motion control Lachat Instruments Equipment for flow injection analysis and ion chromatography   Leica Microsystems Microscopic imaging equipment Based in Germany Linx Printing Technologies Bar coding equipment Packaging industry; based in UK Matco Professional automotive tools   McCrometer Flowmeters   Namco Precision equipment for manufacturing   Negele Hygenic process semnsors Food and beverage and pharma industries Ormco Othodontic equipment   Partlow Readout recording devices and displays   Pelton & Crane Dentist equipment (incl. chairs)   PMA Temperature, pressure, flow and level controllers Based in Germany Portescap Specilaized motors For aerospace, medicine, etc. Qualitrol Controllers for transmission equipment Electric utilities Radiometer Analytical Lab equipment for titration, etc. Based in France Raytek Noncontact temperature measurement systems   Red Jacket Petroleum pumps   Robin Electronic board test equipment Based in UK Sata Hand tools Based in China Securaplane Technologie Airplane safety and display systems   Setra pressure transducers, pressure transmitters and accelerometers   Sonix Electronic microscope systems   Spline Gauges Spline gauges, master gears Based in UK Sunbank Valves and pipe joints Defense industry SybronEndo Dentist equipment   Thomson Precision motion control systems for manufcaturing   Trojan Technologies Water treatment equipment Based in Canada Veeder-Root Fuel gauge and management systems   Videojet Bar coding equipment   West Instruments Industrial temperature controllers   Source: Company data 8:42:19 PM

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