Danaher Corp.’s pending deal to buy medical-testing company Iris International Inc. for $338 million and fold it into Brea-based Beckman Coulter Diagnostics illustrates a trend among large healthcare companies.
Danaher—a Washington, D.C., conglomerate known for its Craftsman tool line—liked Iris enough to pay a 45% premium to acquire the publicly traded Chatsworth-based company.
And that reflects a shift in the financial strategies of large healthcare companies.
Raymond Myers, who follows Iris for Pennsylvania-based Benchmark Co., told the Los Angeles Business Journal recently that healthcare companies increasingly are buying profitable business to boost profits immediately rather than investing in unproven but promising technologies.
Iris—which has 400 workers and roughly $130 million in annual revenue—specializes in automated urinalysis testing in hospitals and clinical laboratories.
It also processes samples and has established a personalized-medicine division with products and research for diagnosing the progress of certain cancers.
Iris posted a 3% uptick in revenue during the second quarter to $30.9 million.
The company plans soon to launch a test called 3Gems to analyze blood or urine samples for medical laboratories.
“They’re a smaller player in the diagnostics equipment space,” said Ben Haynor, an analyst who follows Iris for Minneapolis investment bank Feltl & Co. “They have some interesting technology that would be attractive to an acquirer.”
Danaher’s pending buy takes the fun out of waiting for Iris’ imminent success, Myers said.
“It is a bit unfortunate that shareholders didn’t have an opportunity to realize the value of the 3Gems platform,” he said. “But I think it also speaks to the attractiveness of many small profitable healthcare businesses today.”
Danaher also owns Sybron Dental Specialties Inc., an Orange-based maker of various dental products.
Medtronic CoreValve
Medtronic Inc., a Minnesota-based device maker with 700 Orange County workers, has received European regulatory approval for its Medtronic CoreValve Evolut 23-millimeter minimally invasive replacement heart valve.
CoreValve Evolut is produced locally.
The device maker said it now offers CoreValves in four sizes, including 31 mm, 29 mm and 26 mm.
CoreValve is still years away from U.S. approval. It competes with Irvine-based Edwards Lifesciences Corp.’s Edwards Sapien replacement heart valve in Europe.
CoreValve first received regulatory clearance in 2007 when it was an independent, Irvine-based company.
Medtronic bought CoreValve Inc. in 2009 for $700 million.
Nursing Grant
West Coast University recently gave Orange-based Children’s Hospital of Orange County about $2.2 million as part of the hospital’s Change CHOC, Change the World campaign.
The pediatric hospital will use nearly $1.1 million of the gift to establish a center for nursing excellence, according to a CHOC press release.
The hospital said the $1.1 million will include funds for a nurse researcher and professional development programs designed to further advance nursing and research.
It noted that the gift also includes $600,000 to name three conference rooms at CHOC’s $560 million South Tower, which will open next April, and $550,000 to fund scholarships for CHOC nursing staff members.
CHOC said with West Coast University’s gift, it’s raised $120 million for its campaign.
Its campaign has drawn some high-profile members of Orange County’s business community. The most recent example came at the start of September, when local philanthropists Julia and George Argyros, through their Argyros Family Foundation, donated $5 million toward the creation and development of a dedicated pediatric emergency room.
Bits and Pieces
Össur Americas, a Foothill Ranch medical device maker, signed a distribution agreement with longtime distributor Cascade Orthopedic Supply Inc. for mechanical prostheses. Cascade is based in Chico. … Coastal Fertility Clinic opened a location in the Sand Canyon Medical Office Building in Irvine. The project was done by Brea-based KPRS Construction Services Inc.
