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Stock Guru: Beckman Coulter Parent Could Break Up

Danaher Corp., the conglomerate that owns Brea-based medical testing company Beckman Coulter Inc., could be in line for a potential breakup, according to quirky stock guru Jim Cramer.

Cramer recently called Danaher, which also owns Orange-based KaVo Kerr Group (previously Sybron Dental Specialties), “a good company that could become even better if they separated into two or more independently traded business units.”

Cramer said he would combine Danaher’s life science and diagnostics division with its dental supplies and equipment business—which includes Beckman Coulter and KaVo Kerr—to form a single company.

Those businesses accounted for $2.2 billion, or 46%, of Danaher’s first-quarter sales of $4.6 billion.

If the Washington, D.C.-based conglomerate breaks up, it would be a departure from the many strategic acquisitions it’s made over the past 25 years, including Beckman and what is now KaVo Kerr, acquisitions Cramer has said generated “huge value.”

Danaher bought the then-Sybron, which makes a wide range of dental products, for $2 billion in 2006. It bought Beckman, which makes instruments and supplies for diagnostic tests, for $6.8 billion in 2011.

“They’ve made something like 400 acquisitions since 1984,” Cramer said on his CNBC show. He said that if someone bought 100 shares of Danaher 25 years ago for $1,700, “you’d now have an investment that’s worth nearly $129,000.”

But Cramer said the market environment has since changed and that Danaher’s ability to grow through strategic buys “isn’t nearly as viable as it once was.”

“Danaher has always been a disciplined deal-maker; they don’t like to pay up; that’s why they’re so good,” he said.

“But we’re now in an environment where there’s so much private equity money floating around, it’s become almost impossible for this company to make the kind of smart purchases they were known for,” Cramer said, pointing out that Danaher has lost some recent bidding wars to private equity groups.

He said recent senior leadership changes could be seen as a move by Danaher to place executives in potential future chief executive positions in the event of a breakup.

H. Lawrence Culp, Danaher’s longtime chief executive, said he would retire in March 2015. His replacement is Thomas Joyce, a Danaher executive vice president who previously served as president of Beckman Coulter’s diagnostic business.

Beckman moved its life science business to Indianapolis shortly after Danaher bought it.

Ensign Makes Buys

Mission Viejo-based Ensign Group Inc. said this month that it bought one nursing home each in Colorado and Washington. Purchase prices weren’t disclosed.

The facilities are Rainier Rehabilitation, a 117-bed nursing home in Puyallup, Wash., and Englewood Post-Acute and Rehabilitation, an 82-bed nursing home in Englewood, Colo. Ensign said the facilities’ combined occupancy rate was 71%.

It said one of its subsidiaries purchased two nursing homes in Clintonville, Wis., in a separate deal for an undisclosed price. Pine Manor Healthcare Center has 95 beds, and Greentree Health & Rehabilitation has 60.


Hoag Neurosciences Gets $1M Gift

Hoag Hospital Foundation, which supports Hoag Memorial Hospital Presbyterian, said this month that it received a $1 million gift to support the Hoag Neurosciences Institute.

The gift comes from James and Catherine Emmi of Corona del Mar. James Emmi is the retired president of Kimberly Development Co.; Catherine Emmi is an educator.

Hospital officials said the Emmis’ gift would help it continue to recruit doctors who would expand and coordinate neurological patient care.

Bits & Pieces

NextGen Healthcare Information Systems LLC, a wholly owned subsidiary of Irvine-based Quality Systems Inc., said its products will now successfully transmit clinical care information between disparate technologies, regardless of a provider’s software vendor. Quality said in a news release that “vendor agnostic interoperability” is required for success for achieving “meaningful use” standards. Doctors and hospitals using electronic medical records that meet those requirements are eligible for federal incentive payments. … Children’s Hospital of Orange County received a seven-year reaccreditation for its predoctoral pediatric psychology internship program. The reaccreditation came from the American Psychological Association commission that handles accreditation.

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