Agilent to acquire Dako.

Santa Clara, Calif.-based Agilent Technologies Inc. and Swedish private equity group EQT announced that Agilent will acquire Dako, a Danish cancer diagnostic company. The deal is valued at $2.2 billion in cash, and is the largest purchase in Agilent's history.

Agilent is a measurement company with three businesses: Chemical Analysis, Life Sciences and Electronic Measurement. The company uses gas chromatography and gas chromatography/mass spectrometry, and liquid chromatography and liquid chromatography/mass spectrometry to analyze the composition of air, water, food, drugs, industrial process streams and forensic evidence.

Dako provides diagnostic antibodies, reagents, scientific instruments and software primarily to customers in pathology laboratories. The company also collaborates with various pharmaceutical companies to develop potential new pharmacodiagnostics, also called companion diagnostics, which may be used to identify patients most likely to benefit from a specific targeted therapy. Dako's products are sold in more than 100 countries, and in 2010 its annual revenue was approximately $340 million. The company employs more than 1,000 people globally, primarily in Denmark and Carpinteria, Calif.

According to materials accompanying a conference call on the acquisition, the rationale for the purchase is that it will build a solid foundation in two high growth diagnostics markets: anatomic pathology and molecular diagnostics, with a projected $2.2 billion and $4.5 billion growth factor respectively. The purchase will double Agilent's reagents business. The acquisition also is hoped to provide recurring revenues and reduce volatility, and accelerate Dako's penetration into emerging markets. Finally, Agilent officials see the acquisition as the best use of its overseas cash.

"In the diagnostics market, Dako's products and capabilities are a strategic complement to Agilent's existing offerings," said Bill Sullivan, Agilent president and CEO. "Together we will be able to develop a wider range of products that help in the fight against cancer. Agilent's strategy in acquiring Dako is about strengthening the company's presence in life sciences and about revenue growth."

Lars Holmkvist, CEO of Dako, said, "Our combined companies will have complementary strengths. Like Agilent, Dako has a long history as a leader in scientific advancement and a culture that values discovery and innovation."

The acquisition is expected to close by the end of July, subject to the satisfaction of customary closing conditions.