Danaher shareholders as of June 15 will receive one share of Fortive for every two shares of Danaher owned. In 2015, Fortive accounted for $6.2 billion of Danaher’s $20.6 billion in revenue, and 20,000 of 81,000 employees. The stock will trade under the FTV symbol.
Fortive, which will be based in Everett, Washington, will include brands such as Fluke, Qualitrol, Tektronix, Gilbarco Veeder-Root and Matco Tools, and be a market leader in such areas as professional instrumentation, automation, sensing and transportation technologies. The company’s latest form 10 can be found here. James Lico, who will be President & CEO of Fortive, is a 20 year veteran of Danaher, and he will continue to run Fortive with the “common culture and operating system, the Danaher Business System.” The Rales brothers will own 12.1% of Fortive.
Prior to the transaction, Fortive will borrow $3.25 billion and distribute $3 billion to Danaher. The interest on this debt, while easily manageable, should materially reduce Fortive’s earnings which were $749.9 million in 2015. As usual, management has stated that this will allow new focus on investment in the industrial businesses, which have not been the focus of the combined company. Given Danaher’s long track record, investors would be well-advised to pay attention to both Danaher and Fortive in the months and years ahead.
Disclosure: The author holds no position in any stock mentioned