GE Deal to Sell Its Biopharma Unit to Danaher Could Be at Risk, Says Analyst

丹纳赫214亿美元接手GE生物制药业务,风险犹存

2019-05-17 14:18:20 Barrons.com

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Is Danaher experiencing buyer’s remorse? General Electric’s deal to sell its Biopharma unit to the conglomerate might be in jeopardy, according to Gordon Haskett analyst John Inch, after several competitors posted weaker than expected results. That’s not good new for General Electric (ticker: GE). The company expects to receive $20 billion cash from the asset sale and investors expect GE to use that cash to pay down debt with deal proceeds. Any problems with the Danaher (DHR) deal would certainly mean more volatility for GE shareholders. The back story: Danaher agreed to buy GE Biopharma in February for more than $21 billion, or seven times sales. That was good news for GE shareholders: its stock price jumped 6.4% the day the deal was announced. This deal is the largest sale undertaken by new GE CEOLarry Culp (and, incidentally, former CEO of Danaher). Since its announcement, investors have asked far fewer questions about GE’s debt and liquidity. But debt was a big concern for GE shareholders in the recent past, and the cash from this sale is not in the bank. The company still has high debt levels; industrial debt totaled more than $54 billion at the end of the first quarter. What’s new: Life science equipment supplier Agilent Technologies (A) dropped 11% after reporting earnings on Tuesday. The company cut its full-year sales guidance from $5.2 billion to $5.1 billion. Another health care equipment supplier, Waters (WAT) dropped 12% when it reported numbers back in April. On Waters’ earnings call, management cited weaker than expected demand Europe and China. “The deteriorating life sciences market could still add risks that the deal is renegotiated or scuttled altogether,” Inch wrote in a Thursday research report. “We believe GE would opt to renegotiate the terms of the deal rather than see it fall apart, considering it would appear this deal is critical to meet the company’s debt reduction schedule and deleveraging commitments to the rating agencies and bondholders.” GE wasn’t immediately available for comment, but it isn't certain earnings reports from Agilent or Waters would be justification for Danaher asking to reopen price negotiations. Looking Ahead: In large M&A transactions, it’s typical to have a ‘break-up fee’ that to protect the seller if the buyer gets cold feet. It doesn’t appear that a termination fee is listed in the Danaher-GE deal documents, and GE has not responded to a request for clarification. But regardless of whether the deal includes one, it would be a small consolation prize for GE should the deal fall apart. If something does scuttle the Biopharma deal, GE would likely proceed with an IPO of its entire health care business. That was Culp’s original plan before a buyer for the Biopharma franchise emerged. GE still expects the biopharma sale to close in the fourth quarter of 2019 or the first quarter of 2020.
丹纳赫是否经历了买方的悔恨? 戈登•哈科特( Gordon Haskett )分析师约翰•因斯( John Inch )表示,通用电气( General Electric )将旗下生物制药( Biopharma )部门出售给该集团的交易可能处于危险之中,此前几家竞争对手公布的业绩低于预期。 这对通用电气来说并不是什么新鲜事(股票代码: GE )。该公司预计将从此次资产出售中获得200亿美元现金,投资者预计通用电气将用这笔现金偿还交易收益中的债务。有关 丹纳赫( DHR ) 交易对通用电气股东来说肯定意味着更大的波动性。 背后的故事:丹纳赫同意在二月份以超过210亿美元的价格收购通用生物制药公司,这是销售额的七倍。这对通用电气的股东来说是个好消息:交易宣布当天,通用电气股价上涨了6.4%。 这是通用电气 CEOLarry Culp (顺便说一下,丹纳赫公司前首席执行官)最大的一笔交易。自公告发布以来,投资者对通用电气的债务和流动性提出的问题要少得多。但在最近的一段时间里,债务是通用电气股东的一大担忧,此次出售所获得的现金并不在该银行。该公司的债务水平仍然很高,第一季度末工业债务总额超过540亿美元。 什么是新的:生命科学设备供应商 安捷伦科技公司 ( A )在周二公布收益后下跌11%。该公司将全年销售指引从52亿美元下调至51亿美元。另一家医疗设备供应商, 水域 ( WAT )4月份公布数据时下跌了12%。在 Waters 的财报电话会议上,管理层指出,欧洲和中国的需求低于预期。 Inch 在周四的一份研究报告中写道:“不断恶化的生命科学市场仍可能增加交易重新谈判或彻底失败的风险。”“我们相信,通用电气将选择重新谈判协议条款,而不是让协议分崩离析,考虑到这宗交易似乎对满足该公司的债务削减计划和对评级机构和债券持有人的去杠杆化承诺至关重要。” 通用电气没有立即置评,但并不确定安捷伦或 Waters 的盈利报告会成为丹纳赫要求重新启动价格谈判的理由。 展望未来:在大型并购交易中,通常会有一笔“分手费”来保护买方的利益。丹纳赫-通用电气交易文件中似乎没有列出终止费,通用电气也没有回应澄清请求。但不管这笔交易是否包括一笔交易,如果交易失败,对通用电气来说,这将是一个小小的安慰奖。 如果某件事真的破坏了生物制药的交易,通用电气可能会进行其整个医疗保健业务的 IPO 。这是 Culp 最初的计划,后来出现了一位收购 Biopharma 专营权的买家。 通用电气仍预计,生物制药的销售将在2019年第四季度或2020年第一季度完成。

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