Pall Corp. (PLL) Near Possible Sale - WSJ

(Updated - May 12, 2015 6:39 AM EDT)

Pall Corp. (NYSE: PLL) is in the late stages of an auction that could value the company at roughly $13 billion, the Wall Street Journal reported late Monday.

Potential buyers of the maker of water-filtration and purification systems include Danaher Corp. (NYSE: DHR) and Thermo Fisher Scientific (NYSE: TMO) with final bids due this week, the Journal reported, citing people familiar with the matter.

An exact deal price could not be learned, and the talks could end without a deal, the Journal warned.

Commenting on the strategic rational of a deal, Evercore ISI analyst Ross Muken, said, "PLL's operates in the highly attractive filtration / separations market (MSD to HSD w/ mid 50s GMs), with ~90% of sales recurring / consumable in nature. The business has appealing reach in high-growth markets and the company also offers a substantial LT margin expansion opportunity (likely >1000bp inside of a larger entity). The business is nearly evenly split between Industrial (Process Tech, MicroE and Aerospace) and Life Science (Food & Beverage, Medical, and BioPharma) end markets."

At a potential purchase price of $125 per share, Muken sees accretion of $0.40 in 2016 and $0.55 in 2017 for Danaher. Meanwhile, at the same price they see accretion of $0.35 in 2016 and $0.60 in 2017 for Thermo Fisher Scientific.

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