Danaher to buy Ore. pioneer Tektronix for $2.85 billion

Danaher Corp. is buying test and measurement equipment maker Tektronix for $2.85 billion to expand its electronic testing business.

Under the deal announced Monday, Danaher will make a cash tender offer of $38 per share for Textronix shares, a 34 percent premium to its closing stock price Friday. Tektronix had nearly 75.1 million outstanding common shares as of Sept. 29.

Tektronix Inc., based in Beaverton, said its board unanimously recommended shareholders accept the offer.

"We believe this acquisition will be a catalyst to accelerate Tektronix's transition from a very good company to an even better company," said Rick Wills, chief executive officer.

Danaher is a Washington, D.C.-based company that makes environmental and electronic testing technology, such as bar code readers, as well as dental products and medical instruments. It has a tools and components segment, which includes such brand names as Sears' Craftsman. It earned $1.12 billion on sales of $9.6 billion in 2006.

Tektronix is Oregon's oldest major high-tech company and an early leader in the state's high-tech industry. Its primary markets are high-end communications and technology testing products. Tektronix reported a 2007 profit of $90.4 million on sales of $1.11 billion.

Tektronix would become part of Danaher's electronic test platform, joining with Danaher's Everett, Wash., testing business Fluke — nearly doubling the platform's revenue.

Tektronix is expected to operate as a wholly owned subsidiary and maintain its presence in Beaverton.

The companies said the deal will help expand the reach of both companies — with Tektronix benefiting from Danaher's size and funding. Danaher anticipates gains from Tektronix's specialty markets and global reach, particularly in Asia.

Wills said the the two companies have little overlap and many synergies.

The announcement surprised some analysts. Tektronix had not given any indication it was entertaining bids and has long been an industry leader in its product categories.

The news boosted Tektronix stock by 33 percent, or $9.31, to $37.65 Monday.

Richard Eastman, senior analyst for Robert W. Baird & Co. in San Francisco, called it an "excellent combination."

In addition to the scale and product breadth, Eastman said both companies have had strong products and good exposure to emerging markets.

Danaher said on a conference call that the company expects the acquisition to have a positive impact of 8 to 12 cents per share in 2008, and up to 15 to 20 cents per share by 2010.

Danaher shares fell $1.21, or 1.5 percent, to $81.26.

The transaction is expected to close in the fourth quarter of 2007.