Cepheid Returns 50% To STI Investors In 26 Trading Days

(RTTNews) - In 26 trading days, after featuring on Short-Term Investor, Cepheid (CPHD) returned about 50% to investors. The stock was featured on our 'Short-Term Investor' on July 29 at an opening price of $35.13. Yesterday, the company agreed to be acquired by Danaher Corp. (DHR) for $53 per share in cash. The acquisition price represents a 50% premium from our published price.

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Cepheid Tuesday announced a definitive merger agreement to be acquired by Danaher Corp. (DHR) for $53 per share in cash, or a total enterprise value of about $4 billion including indebtedness and net of acquired cash. The offer represents about a 54% premium to Cepheid's common stock over the closing price on September 2.

Danaher expects the acquisition to be moderately dilutive to net earnings per share and about $0.05 accretive to adjusted net earnings per share in the first full year post acquisition. In the fifth full year post acquisition, the Company expects the acquisition to be about $0.30 accretive to adjusted net earnings per share.

The acquisition has been unanimously approved by the Board of Directors of each company, and the Cepheid Board of Directors has unanimously recommended its shareholders to approve the transaction. The deal is expected to be completed around the end of calendar year 2016.

Sunnyvale, California - based Cepheid will become part of Danaher's $5 billion Diagnostics segment, joining the company's Beckman Coulter, Leica Biosystems and Radiometer businesses.

Cepheid generated annual revenues of $539 million in 2015 and expects to generate $618 million - $635 million in revenues in 2016.

Danaher's President and CEO, Thomas Joyce, Jr., said, "Cepheid's extensive installed base, test menu and innovative product offering contribute to its market leadership in molecular diagnostics and we expect it to strengthen our position in this high-growth segment."

Further Joyce Jr. noted that Cepheid will be well-positioned to improve operational efficiencies, significantly expand margins and drive long-term growth. We look forward to welcoming the Cepheid team to Danaher."

Danaher expects to finance the transaction with available cash and proceeds from the issuance of debt. Fenwick & West LLP is Cepheid's legal advisor, while Goldman, Sachs & Co. is acting as Cepheid's exclusive financial advisor.