TLDR
- Danaher is acquiring Masimo for $9.9 billion including debt, paying $180 per share in an all-cash deal
- The offer represents a 38.3% premium to Masimo’s last closing price before the announcement
- Masimo shares surged approximately 34% on Tuesday, on track for the biggest one-day gain in company history
- Danaher stock dropped 3.5% as investors digested the acquisition news and premium price paid
- Masimo will operate as a stand-alone company within Danaher’s Diagnostics segment following deal completion
Danaher announced Tuesday it will acquire pulse oximeter maker Masimo for $9.9 billion including debt. The all-cash transaction values Masimo at $180 per share.
The offer represents a 38.3% premium to Masimo’s closing price on Friday. Masimo shares rocketed roughly 34% Tuesday morning to top $174.40.
If gains hold through the session, the stock is on pace for its biggest one-day percentage rise on record. Data from Dow Jones Market Data goes back to mid-2007.
Danaher shares moved in the opposite direction. The stock dropped 3.5% as investors processed the acquisition and premium paid.
The deal bolsters Danaher’s diagnostics portfolio as the contract research firm expands its medical technology footprint. Masimo has a market capitalization of about $7 billion.
Danaher is valued at over $150 billion. The acquisition marks one of the larger deals in the medical device space in recent years.
Masimo to Join Danaher’s Diagnostics Segment
Following deal completion, Masimo will operate as a stand-alone company within Danaher’s Diagnostics segment. This structure allows Masimo to maintain operational independence while gaining Danaher’s resources.
Contract research firms have faced headwinds recently. Uncertainty around U.S. drug pricing regulations has created challenges for the sector.
Potential tariff policies have added another layer of complexity. Softer academic and government research funding has pressured growth prospects.
The acquisition comes as Masimo has been locked in a legal battle with Apple over patents. The iPhone maker has disputed Masimo’s pulse oximeter technology patents.
Deal Terms and Timeline
Danaher will pay $180 per share in cash for all outstanding Masimo shares. The transaction includes the assumption of Masimo’s debt obligations.
The deal values Masimo’s equity at approximately $7 billion. Including debt, the total enterprise value reaches $9.9 billion.
The companies did not disclose an expected closing timeline. Regulatory approvals and customary closing conditions will need to be satisfied.
Masimo shareholders will receive the cash payment upon deal completion. No stock consideration is part of the transaction structure.
The premium paid reflects Masimo’s position in the medical device market. Pulse oximetry technology has become increasingly important in healthcare monitoring.
Danaher’s diagnostics business will gain expanded capabilities through the acquisition. The deal aligns with Danaher’s strategy to grow its life sciences and diagnostics operations.
Tuesday’s announcement sent Masimo shares to levels not seen since early 2022. The stock had traded below $130 for much of the past year.
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