Danaher Stock Rises 4.5% on Revenue Growth Expectations, Plans to Divest Segment

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Danher (NYSE: DHR) the stock rose 4.5% post-market on Wednesday after the company forecast third-quarter core revenue growth above its forecast and intends to separate its environmental and applied solutions segment to create an independent listed company.

Core revenue growth in the third quarter was driven by higher Cepheid breath tests revenue, which is expected to exceed $500 million versus the previous outlook of approximately $325 million.

The new independent company will be made up of DHR’s water quality and product identification businesses and will be called ‘EAS’ until named.

The transaction is intended to be tax-free for DHR shareholders and is expected to close in the fourth quarter of 2023.

EAS will be comprised of DHR’s operating companies including Hach, ChemTreat, Trojan, OTT, McCrometer, Videojet, X-Rite Pantone, Esko and Linx.

DHR’s environmental and applied solutions segment revenue was approximately $4.7 billion in 2021.

As a stand-alone business, EAS is expected to have a superior credit rating.

“With this announcement, DHR will become a more focused science and technology leader,” said DHR CEO Rainer Blair.

Jennifer Honeycutt will become president and CEO of EAS once the separation is complete. She is currently Executive Vice President responsible for DHR’s Environmental and Applied Solutions segment.