After a turbulent four years of restructuring and proxy battles that shook up its leadership, Masimo Corp. is set to be acquired by Danaher Corp. for $9.9 billion in yet another unexpected twist.
Washington, D.C.-based Danaher, a global conglomerate with business segments in life sciences, diagnostics and biotechnology valued at $146 billion, is paying $180 per share in cash, representing a nearly 40% premium to Masimo’s closing value of $130.15 on Feb. 13.
Masimo’s portfolio of non-invasive patient monitoring technologies would join Danaher’s diagnostics segment, which comprises six companies, including Brea-based Beckman Coulter Diagnostics.
Officials called the deal an ideal fit and said that the board evaluated a “range of opportunities,” including pursuing its own standalone strategy, over the past several months.
“Ultimately, it became evident that this transaction with Danaher was the most value-enhancing path for Masimo and all its stakeholders,” Michelle Brennan, chair of Masimo’s board of directors, said in a statement.
Shares reaffirmed the board’s decision, jumping more than 34% to $174.69 apiece and a $9.4 billion market cap following last week’s announcement.
Masimo will keep its brand and headquarters in Irvine upon closing of the deal, which is expected in the second half of this year. While it has not been confirmed who will lead the unit, Masimo Chief Executive Katie Szyman said the company has been in talks with Julie Sawyer Montgomery, who was president at Beckman Coulter before being promoted to executive vice president in charge of Danaher’s Diagnostic group, which will oversee Masimo.
“As we have gotten to know Julie and her team, we have been very impressed with how well-aligned they are with our core values of patients first, innovation, performance and people,” Szyman wrote in an email with the subject headline “Masimo’s Next Chapter” to employees on Feb. 17.
“Masimo is a great strategic fit for us, with a leadership position in pulse oximetry, strong clinical track record and a culture of innovation that’s driven meaningful impact for patients in clinical care settings around the world,” Sawyer Montgomery wrote on her LinkedIn page.
Meanwhile, Masimo is scheduled to report fourth-quarter and full-year earnings on Feb. 26.
The company expects revenues of approximately $411 million and $1.52 billion for the fourth quarter and full year, respectively, according to preliminary financial results posted on Jan. 12. It will not be hosting a conference call due to the announced acquisition.
Leadership Change Up
Joe Kiani founded Masimo out of his Aliso Viejo garage in 1989.
He set out to solve the clinical issue of inaccurate blood oxygen readings. Many devices at the time produced faulty readings in patients with very weak pulses, such as babies. Faulty readings would also be caused by movement.
If a monitor provides a false reading of not enough oxygen, a premature baby may be given too much oxygen, which can lead to blindness, while a lack of oxygen can cause brain damage, making accurate readings vital in the NICU.
This problem prompted Kiani to co-invent a more accurate pulse oximeter that reduced faulty readings. The company’s technology showed to have 86% fewer false alarms in a study with non-sedated neonates.
Under his leadership, Masimo grew from a garage startup to a company with more than $2 billion in annual sales. At one point, its market cap topped $14 billion. Today, more than 200 million patients are monitored annually using Masimo’s technologies, according to the company.
“I am happy to see Masimo in Danaher’s hands, which is founder-run, and does things for the long term,” Kiani told the Business Journal over email.
Kiani resigned as chief executive of Masimo in 2024 after being ousted from the board following a two-year proxy battle between Masimo and New York-based activist investor Politan Capital Management.
He was succeeded last February by Szyman, previously worldwide president of BD Advanced Patient Monitoring, the former Critical Care unit of Edwards Lifesciences Corp., which was acquired in 2024 by Becton, Dickinson and Co. for $4.2 billion.
Szyman was brought on as CEO to refocus the company on its core healthcare business, which sells to hospitals. Under her leadership, the company sold its Sound United consumer audio business to Harman International for $350 million.
Masimo originally paid $1 billion in 2022 for the unit; Kiani had envisioned combining Masimo’s hospital-grade technology with consumer devices like hearing aids and watches.
The acquisition wasn’t well received by investors, causing the company’s market value to fall by $5.2 billion in one day, and it became one of the main reasons Politan moved to oust Kiani from the company.
Kiani owns 5.9 million shares, or 10.3% of the company, which are worth about $1.03 billion, according to a Dec. 31 filing.
Posed to Join Danaher’s Diagnostics Umbrella
Masimo would join Danaher’s diagnostics segment, which includes Beckman Coulter, Cepheid, HemoCue, Leica Biosystems, Mammotome and Radiometer.
Danaher projects that Masimo will generate earnings before interest, taxes, depreciation and amortization (EBITDA) of more than $530 million in 2027.
Masimo would be a new vertical for Danaher, some analysts say.
“The deal represents somewhat of a step into a new arena as we view pulse ox more as med tech than traditional diagnostics,” Raymond James analyst Andrew Cooper wrote in a note to investors on Feb. 17.
“Aside from this perspective, we think some investors are asking whether Danaher is acquiring from an opportunistic position of strength or from a position of needing to add this growth relative to its long-term targets and current positioning. Our view is somewhere in the middle.”
Raymond James analyst Jayson Bedford said that the proxy drama over the last few years and the inflationary impact of COVID-19 and the tariffs have weighed on the stock, providing an opportunity for Danaher to acquire it.
“We are a bit surprised by the timing, as we thought an acquirer would have waited for MASI’s pipeline to evolve. That said, MASI is a high-quality business with a leading market share position and a recurring revenue stream,” Bedford wrote.
Piper Sandler analysts Jason Bednar, Joseph Downing and Andrea Irawan downgraded its rating for Masimo to Neutral and lowered its price target from $210 to $180 to match the announced deal.
“The deal value represents a solid valuation and premium for MASI shareholders, albeit a far cry from the pre-Sound United peak and even a touch below where shares topped out in February 2025, but still admirable a deal acceptable to both parties could be reached considering recent medtech valuation volatility,” the analysts said.
Deal Expands Danaher OC Footprint
The acquisition is set to deepen Danaher’s Orange County footprint. In 2018, Danaher spun off Brea-based Envista Holdings Corp., its former dental unit. Envista went public a year later, following a $643 million initial public offering, and is currently valued at $4.7 billion (NYSE: NVST).
In 2011, Danaher acquired Beckman Coulter, also based in Brea, for $6.8 billion. The company was founded in the 1930s by Dr. Arnold O. Beckman, who became famous for finding a solution for determining the precise measurement of pH in lemon juice—the acidimeter, or pH meter. In 1997, it acquired Coulter Electronics to add hematology, flow cytometry and hemostasis product lines.
Nowadays, Beckman Coulter has an estimated 611 local employees and 10,347 companywide, making it the second largest medical diagnostics company in Orange County.
Last year, the company expanded the assay menu of its Dxl 9000 immunoassay platform with notable progress in neurodegenerative disease assays, Danaher said.
Danaher reported that full-year revenue for 2025 increased 3% to $24.6 billion.
Diagnostics made up the largest portion of the figure out of Danaher’s three segments, seeing revenues of $9.9 billion, a 1.5% increase from the year prior.
Earlier this month, the Business Journal reported that the legendary medtech company is leaving its Brea facilities following Dwight Manley’s purchase of the property for $140 million. The local investor has struck a deal to bring Brea’s first Costco to the site. Beckman said it plans to relocate its offices when its lease expires in 2028.
