KENTWOOD ? X-Rite announced Tuesday it would be acquired for $5.55 a share, or $468 million – $625 million including the assumption of debt – by Washington D.C.-based Danaher, a former real estate trust turned conglomerate.
Danaher pays a valuation multiple of 2 times annual revenue and 10 times earnings for the technology company focusing on color management services. The price represents a good premium over X-Rite’s lows of close to $1 in 2009, but long term holds who bought the stock at $15 per share in 2007 are probably less happy.
X-Rite said the transaction had been approved unanimously by its board of directors, and announced that stockholders representing approximately 68 percent of the voting power of X-Rite?s outstanding shares intend to tender their shares into the offer.
?Joining Danaher enhances X-Rite?s ability to achieve our growth goals while realizing a significant and immediate all-cash premium for X-Rite stockholders,? said X-Rite CEO Thomas J. Vacchiano Jr, in a prepared statement. ?Danaher?s global scale, market presence and resources will allow X-Rite to accelerate our growth, particularly for our key strategic initiatives like PantoneLIVE and Appearance solutions. As part of Danaher, X-Rite will be able to expand our access to new markets and complementary technologies.?
Danaher and X-Rite said that after the transaction, X-Rite will operate as a stand-alone company within Danaher?s Product Identification group, which is a part of their Industrial Technology Segment. X-Rite?s existing management team will continue to hold key senior leadership positions at the company following the close of the transaction. X-Rite will continue to do business under its existing X-Rite, Pantone and other leading brands.
?Our commitment to our customers, employees, partners and local communities remains unchanged,? Vacchiano said. ?We expect X-Rite customers and employees to benefit from our being part of a larger, stronger company focused on growth and innovation and which shares our passion for retaining, developing and recruiting the best talent available.?
Danaher said the transaction is expected to close by June 30.
X-Rite develops, manufactures, markets and supports color measurement systems, software, color standards and services. X-Rite serves a range of industries, including printing, packaging, photography, graphic design, video, automotive, paints, plastics, textiles, dental and medical.
The proposed buyout is already prompting rumblings from law firms that investigate shareholders’ rights. Dallas-based Powers Taylor LLP and former Securities and Exchange Commission attorney Willie Briscoe both said they are investigating the sale.
?Based on the lack of a significant premium to X-Rite shareholders, and other factors, the firms are investigating whether the buyout price is fair to X-Rite shareholders,? Briscoe and the firm said in a joint statement. ?Our proposed shareholder lawsuit seeks to obtain additional value for shareholders than what is proposed in the current buyout offer.?
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