According to the Grand Rapids, MI-based company it enables X-Rite to not only shed its debt burden, but will also generate substantial synergies by enabling the to company to work closely with other Danaher companies such as VideoJet and Esko.
"Danaher is known for doing what’s right for their customers," X-Rite-Pantone senior VP, sales and marketing Vic Stalam told PrintWeek, dismissing concerns that X-Rite may suffer from too much input from its new parent company.
"We don’t anticipate that. X-Rite participates in quite diverse markets—anywhere from print imaging to industrial with textiles, plastics, cosmetics and even in retail. So if anything they’re going to help us make the appropriate level of investments so we can do a better job in each segment. I don’t see anything negative in this transaction," he added.
Stalam noted that, while Danaher’s corporate headquarters is in Washington, DC, it will actually be working with the company’s Chicago-based Product Identification group.
"VideoJet and Esko Graphics are also managed out of Chicago and they’ll be part of the same group," he added.
X-Rite has spent the last few years trying to pay down a huge debt generated by several acquisitions. However, last year it reported nearly $50 million in profit and cut nearly $120m from 2009's debt figure of $270m.
Danaher has said the deal will add $237m in annual revenue to its industrial technologies unit, which generates over $3 billion in sales or nearly 20% of the $18 billion generated by the entire 60,000 staff company.
"We are excited about the opportunity to acquire two premier brands in X-Rite and Pantone," said William K. Daniel II, executive vice president of Danaher. "Color measurement is an attractive market adjacent to our existing product identification businesses.
"X-Rite's color measurement technologies complement Esko's digital packaging design capabilities to provide customers with a full range of solutions to meet their packaging and design needs. Along with Videojet and Esko, we believe X-Rite and Pantone will further Danaher's leading position in the Product Identification industry and present an attractive value creation opportunity."
X-Rite's board of directors has unanimously recommended the deal to shareholders, resulting in around 68% of the voting power of X-Rite's outstanding shares indicating that they will approve the deal. The $5.55 per share deal will provide X-Rite shareholders with a 40% premium on the company's stock price of earlier this week.
The transaction is expected to be completed during Q2 2012, and Stalam noted X-Rite will have to wait until regulatory hurdles are cleared before they can formally begin short- and long-term planning with Daniels and the rest of Danaher’s Chicago-based operations. But he added, "We’ve had discussions with them, no question."
