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 Danaher said on Monday it would pay 17.10 Swiss francs per Nobel
Biocare share in cash, about 23 percent above Nobel Biocare's
closing price on July 28, the day before the Swiss firm said it was
in talks with potential buyers.
However, Nobel Biocare shares fell as much as 6 percent after
analysts had predicted the company could fetch over 20 francs per
share.
"From my side, it doesn’t fill me with that much enthusiasm. But I
don’t expect there will be a second bid," Sebastien Buch, a
portfolio manager at Union Investment which owns roughly 3 percent
of Nobel Biocare’s shares, told Reuters.
Danaher is a leading provider of dental equipment, but only a small
player in the fragmented dental implant market after its acquisition
of low-cost manufacturer Implant Direct.
The purchase of Nobel Biocare, the world's No.2 dental implants
maker, will bring Danaher a premium range of implants and boost its
dental business to sales of around $3 billion.
Vontobel analysts forecast the global dental implants market is set
to double to $6 billion by 2025, helped by recovering Western
economies and rising incomes in developing countries.
"This combination will help us build a strong platform for future
growth," said Henk van Duijnhoven, Senior Vice President of
Danaher's Dental segment in a statement.
Fellow dental implant players such as Henry Schein and Dentsply had
been cited as possible bidders for Nobel Biocare, while the company
had reportedly also attracted interest from buyout group EQT
Partners.
Analysts at Berenberg said it was "by no means a certainty" that
Nobel Biocare's shareholders would agree to tender their shares at
Danaher's price, adding it was possible that other potential suitors
could enter the fray with a higher offer.
The deal, recommended by Nobel Biocare's board, requires the
acceptance of 67 percent of Nobel Biocare's shareholders.
But other analysts said the price was fair and counter bids looked
unlikely. Swiss rival Straumann ruled out interest in Nobel
Biocare last month, while Zimmer is busy with its purchase of Biomet
Inc for more than $13 billion.
"Nobel has run an extensive sales process and we believe that Nobel
is less attractive for private equity in light of its weak cash flow
and no synergy opportunities," said Bank of America Merrill Lynch
analyst Ed Ridley-Day.
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MEDTECH M&A
The Nobel Biocare deal follows on from a wave of mergers among
medical supplies makers this year, including Medtronic Inc's $42.9
billion deal to buy Dublin-based Covidien Plc in June.
Like other makers of premium implants, Nobel Biocare has struggled
since the financial crisis as cash-strapped consumers, particularly
in southern Europe, cut back on pricey dental work which is not
generally reimbursed by insurers.
Nobel Biocare's stock is down 80 percent since its all-time high in
2007. The company grappled with years of sliding sales and dwindling
market share as it faced competition from a growing number of
so-called "value" players.
But signs have grown that a long-awaited turnaround is taking root
and the company has notched up five consecutive quarters of revenue
growth at constant exchange rates.
Nobel Biocare had sales of 567 million euros ($735 million) and net
profit of 42.6 million euros in 2013. It has $556 million of bonds
and loans.
Danaher said Nobel Biocare would continue to operate as a standalone
company and maintain its own brand and identity.
The deal is expected to be completed in late 2014 or early 2015.
Nobel Biocare was advised by Goldman Sachs, while Credit Suisse is
acting as financial adviser and offer manager.
At 1045 GMT (6.45 a.m. EDT), Nobel Biocare shares were down 5.5
percent at 17.05 Swiss francs.
(Additional reporting by Supriya Kurane in Bangalore; Editing by
Louise Heavens and Mark Potter)
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