DOW JONES NEWSWIRES
PerkinElmer Inc. (PKI) said it has agreed to sell its
Illumination and Detection Solutions business to private-equity
firm Veritas Capital Fund III LP for about $500 million in
cash.
The company, which sells analytical products and services to the
health-care and industrial sectors, plans to use about $470 million
in net after-tax cash proceeds for possible acquisitions and stock
repurchases, and the board increased its buyback program by 13
million shares.
PerkinElmer, which said it would report the segment as a
discontinued operation, also forecast third-quarter earnings from
continuing operations of 27 cents to 29 cents, while analysts were
looking for 35 cents, according to a poll by Thomson Reuters. The
company also forecast 2010 earnings from continuing operations of
$1.24 to $1.29. Analysts estimated $1.27.
Chairman and Chief Executive Robert Friel said the divestiture
"reduces the complexity of the company and frees up capital to
reinvest in our more attractive Human Health and Environmental
Health end markets."
The deal also should reduce PerkinElmer's exposure to more
cyclical markets and lead to higher revenue and adjusted gross
margins, Friel said.
The Illumination and Detection Solutions business, which has
about 3,000 employees and 14 manufacturing facilities worldwide,
makes custom-designed specialty lighting and sensor components for
manufacturers of health, environmental and security products. It is
expected to generate about $300 million in revenue this year.
This month, PerkinElmer reported its second-quarter profit
nearly tripled, topping forecasts, on strong revenue growth in the
environmental health division.
The company saw revenue slide last year as the recession took a
toll on its research and environmental businesses. But Friel has
said those pressures are easing. And the company has been active in
acquisitions.
Shares were at $21, down 1 cent, in after-hours trading.
-By Kathy Shwiff, Dow Jones Newswires; 212-416-2357;
kathy.shwiff@dowjones.com