A tale of two exits

US toolmaker Danaher Corporation has agreed to the US$950m purchase of Leica Geosystems, a Switzerland-listed spatial measurement instrument manufacturer, in a deal that reflects the different histories of two former Unotec subsidiaries.

Danaher’s offer is its second recently for a Leica-branded business. At the start of July, using advice from Lehman Brothers, it offered US$538m for Leica Microsystems, a German-listed scientific instrument maker that was advised by JP Morgan.

The lower price for Microsystems came even though the company has higher revenues than its former sibling. Danaher said Microsystems had revenues of US$660m in 2004, while Geosystems had sales of US$600m in its last financial year.

The two Leica-branded businesses, alongside Leica Cameras, had been split in 1997 by then-parent Unotec, an investment holding company run by chairman Stephan Schmidheiny, a noted Swiss philanthropist and sustainable development guru. A year later, Leica Geosystems and Microsystems were sold to buyout firms using advice from CSFB. Permira, then operating as Schroder Ventures, paid US$500m for Leica Microsystems, while Investcorp bought Leica Geosystems for US$300m.

Permira, which owns a reported 93.5% of Microsystems, had previously hired UBS to carry out a €300m float of the company in 2000, before it was pulled due to market conditions. Investcorp, however, successfully floated Geosystems in July 2000, raising an estimated US$560m for its total stake.

Danaher has retained Lehman for its deal to buy Leica Microsystems. It has offered US$386 per share for Leica Geosystems, including US$80m of debt, which the target’s board has accepted. Advice to Leica Geosystems came from CSFB and a fairness valuation came from Lombard Odier Darier Hentsch.

Danaher owns 4% of Leica Geosystems and has agreements with a further 6% of shareholders. Its offer is nearly 15% higher than a rival bid of made on June 13 by Sweden’s Hexagon that had been rejected.