By Sabrina Valle and Gnaneshwar Rajan
Feb 17 (Reuters) - Danaher, a $150 billion U.S. company that makes tools used in developing and testing medicines, on Tuesday agreed to buy Masimo for $9.9 billion, expanding in patient-monitoring devices in a surprise move outside its main focus.
The deal values Masimo at $180 per share - a 38.3% premium to its last close.
Danaher shares fell almost 3% to $206, while Masimo's shares rose 34% to $174.69.
California-based Masimo is best known for the devices hospitals
use to measure blood‑oxygen levels, including the pulse oximeters clipped to a patient’s finger, along with other non‑invasive monitors that track breathing and brain activity.
Masimo has drawn attention beyond hospitals because of a long-running patent dispute with Apple over blood‑oxygen technology used in smartwatches.
The market for blood oxygen monitoring products is dominated by rival Medtronic and Masimo.
J.P. Morgan analysts said the move was unexpected, noting that investors had anticipated Danaher would target acquisitions closer to its core life‑sciences and diagnostics businesses.
They warned the shift toward patient‑monitoring equipment could pressure the shares in the short term, as it may signal that opportunities in Danaher’s traditional markets are less attractive in the current environment.
At the same time, they said Masimo’s high share in pulse‑oximetry, strong recurring‑revenue base and margin expansion potential fit Danaher’s long‑standing playbook of buying standalone units with room to grow.
Bernstein analyst Christian Moore expects the acquisition to prove to be a good one for Danaher over time.
The deal with Masimo broadens Danaher's diagnostic segment, complementing its invasive Radiometer blood analyzer devices with Masimo's non-invasive pulse oximeters, brain function and respiration monitoring devices, among other products.
Masimo recently transformed itself into a "pure-play" medical technology firm after selling its Sound United unit, which held audio brands Denon and Marantz, to Samsung's Harman last year for $350 million.
Danaher expects a 15 to 20 cents boost to its adjusted diluted net earnings per common share in the first full year and about 70 cents in the fifth full year following the completion of the acquisition.
The deal is expected to close by the second half of 2026.
(Reporting by Sabrina Valle in New York; Gnaneshwar Rajan and Christy Santhosh in Bengaluru; Editing by Shinjini Ganguli and Sonali Paul)
