Does Cepheid (NASDAQ: CPHD)’s sale to Danaher (DHR) make sense?


Questions have been raised over Cepheid (NASDAQ: CPHD)’s decision to sell itself to Danaher Corporation (NYSE:DHR). At least two law firms have announced that they are investigating CPHD to determine if the buyout amount is worth it.

Cepheid (NASDAQ: CPHD) has accepted to be acquired by Danaher for $53 per share, which means that the transaction values the company at $4 billion including debt. Though Danaher’s offer of $53 per share indicates a premium over the closing price of CPHD shares on the last day of trading before the deal was made public, some believe Cepheid could be worth more.

That is why shareholder rights attorneys at Kahn Swick & Foti, LLC (KSF) and Harwood Feffer LLP are investigating the proposed sale of Cepheid (NASDAQ: CPHD) to Danaher. Their investigations will focus on whether the board of CPHD fulfilled its fiduciary duty in agreeing to sell the company for about $4 billion.

As such, the investigators will be probing potential claims that shareholders of CPHD can bring against the company for violating federal securities laws concerning fiduciary responsibility. However, there is no guarantee that the investigations will find any faults with the deal or lead to a class action against Cepheid. Nevertheless, the probes are a great way to ensure that shareholders are getting from the transaction what they deserve.

Clearance by the boards

The boards of Cepheid (NASDAQ: CPHD) and Danaher have given the green light for the companies to combine. If the transaction closes successfully, Danaher sees CPHD boosting its EPS by $0.05 in the first year and $0.30 in the fifth year.

The acquisition of CPHD will immediately provide a boost to Danaher’s topline. CPHD generated revenue of $539 million in 2015 and it was looking for revenue in the band of $618 to $635 million in 2016.

Deal approval – Cepheid (NASDAQ: CPHD)

Shareholders of Cepheid (NASDAQ: CPHD) will have to give their approval of the deal before the transaction can close. If all goes according to plan, Danaher hopes to finish the business before the end of this year.


Leave A Reply