Danaher to offer its shareholders an Envista stock swap

Jeremy Booth, Dental Tribune International

Fri. 22. November 2019

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WASHINGTON, U.S.: Danaher Corp. has announced an exchange offer through which its shareholders will have the opportunity to swap their Danaher stock for the stock in Envista that the corporation retained after its September spinoff of the dental products company.

Danaher retained an 80.6% ownership of Envista after the September initial public offering (IPO) when the company spun off its dental businesses Nobel Biocare, Ormco and KaVo Kerr into the company Envista. Investors and underwriters purchased 30.78 million shares in Envista in the IPO, and the percentage of Envista that Danaher still holds represents 127.87 million Envista shares.

Danaher announced the following details of the exchange offer: Danaher stockholders will be permitted to exchange all, some, or none of their Danaher common stock for Envista common stock at a discount of 7%. The offer to swap will be subject to an upper limit of 5.5784 Envista common stock shares for each of the Danaher shares tendered in the offer. “If the upper limit is not in effect, for each $100 of Danaher common stock accepted in the exchange offer, tendering stockholders would receive approximately $107.53 of Envista common stock,” the parent company explained.

“The company spun off its dental businesses Nobel Biocare, Ormco and KaVo Kerr into the company Envista.”

The exchange offer is set to expire at midnight EST on Dec. 13, 2019, and the values of the two common stocks in the exchange will be determined by their volume-weighted average prices during the trading days of Dec. 9, 10 and 11. Danaher will announce the final exchange ratio and whether or not the upper limit is in effect on its investor relations page by 5:30 pm EST on Dec. 10.

At least 38.36 million shares of Envista must be exchanged for Danaher shares in order to complete the exchange offer. The company said that it anticipates the exchange offer to be free of tax for its U.S. shareholders and that the exchange offer could be extended or terminated.

In late October, Envista announced its first quarterly results after its separation from Danaher. Net earnings for the three-month period ending Sept. 27 were $62 million (€56 million), or $0.48 per generally accepted accounting principles (GAAP) diluted share, which represents a 4% decrease from the comparable period in 2018. Revenue for the period was $659.3 million, down around 3% from the $679.5 million posted in the third quarter in 2018.

Amir Aghdaei, CEO of Envista, said in a press release that the company was pleased with its first results as a public company. “The team has made traction on several cost initiatives resulting in earnings, margins, and cash flow that exceeded our expectations. Revenue was slightly lower than anticipated, a result of our brand consolidation efforts and weaker equipment demand,” he stated.

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