PerkinElmer Inc. (NYSE:PKI) completed the offloading of its illumination and detection solutions business to a private equity firm for a half billion.
The unit went to Excelitas Technologies Corp., an affiliate of New York-based private equity firm Veritas Capital Fund III LP, and netted the Waltham, Mass.-based diagnostics and equipment giant $482 million, according to the company.
The 3,000-employee division, with 14 plants around the world, makes custom lighting and sensors for the OEM market in the health, environmental and security industries. PerkinElmer said it expects the business to generate about $300 million in revenues this year.
When the company announced the deal in August, CEO Robert Friel said the move was aimed at reducing the complexity of the company and freeing resources to pursue the human and environmental health markets. The deal is also expected to boost adjusted gross margins by 200 basis points, Friel said, which should in turn juice earnings.
"The completion of the transaction also frees up capital to reinvest in our more attractive businesses, and pursue targeted acquisitions to complement and expand our portfolio, as well as repurchase shares," he said in a statement announcing the deal’s closure.
PerkinElmer’s board of directors gave the green light to increasing the company’s stock buyback plan by 13 million shares when it announced the divestiture. The company also said the deal will dilute 2011 earnings by 5 percent to 6 percent, or 8 cents to 10 cents, and forecast EPS from continuing operations of $1.06 to $1.11.
PKI shares closed down 0.68 percent to $23.30, an 11 percent increase over the closing price of the company’s shares on the day the sale of the unit was announced.