Medical tech firm Danaher to buy Abcam in deal valued at $5.7 billion

(Reuters) -Danaher Corp said on Monday it would buy smaller rival Abcam Plc in a deal valued at $5.7 billion including debt, as the medical tools supplier eyes bigger contracts by expanding its services.

The deal will help Danaher (NYSE:) bulk up in the face of a funding crunch among small-sized biotech companies that has dented demand for its products used to develop treatments and vaccines.

The company, one of the world’s largest suppliers of medical tools, in July cut its annual sales growth forecast for a second straight quarter, weighed down by the funding crunch in the drug development market.

Danaher, which has a market value of nearly $190 billion, has turned to dealmaking in recent years. It acquired General Electric (NYSE:) Co’s biopharma solution business for $21.4 billion in 2019 and contract development and manufacturing organization Aldevron for $9.6 billion in 2021.

Danaher will pay $24 per share in cash, a 2.7% premium to Abcam’s last closing price. Abcam’s shares were down about 4% in premarket trading at $22.44.

Abcam’s shares rose 17% in mid-June after Bloomberg reported that the company was fielding takeover interest. They closed up 3.9% on Friday after Reuters reported that Danaher was in the lead to acquire the company.

Cambridge, England-based Abcam has come under pressure from activist shareholders to sell itself, including its founder Jonathan Milner who owns 6.1% of the company, as well as hedge fund Starboard Value LP.