Danaher (NYSE:DHR) stock rose 4.5% postmarket on Wednesday after the firm projected Q3 core revenue growth above its guidance and intends to separate its environmental and applied solutions segment to create an independent, publicly traded company.
Q3 core revenue growth was driven by higher Cepheid respiratory testing revenue, which is projected to be over $500M vs. prior outlook of ~$325M.
The new independent company will be comprised of DHR's water quality and product identification businesses and will be referred to as "EAS" till it is named.
The deal is intended to be tax-free to DHR shareholders and is expected to be completed in Q4 2023.
EAS will be comprised of DHR's operating firms including Hach, ChemTreat, Trojan, OTT, McCrometer, Videojet, X-Rite Pantone, Esko and Linx.
DHR's environmental and applied solutions segment's revenue was ~$4.7B billion in 2021.
As a standalone firm, EAS is expected to have investment-grade 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 completed. She currently serves as EVP with responsibility for DHR's environmental & applied solutions segment.