PerkinElmer Inc. (NYSE:PKI) plans to deal its illumination and detection solutions business to a private equity firm for a cool half billion.
The Waltham, Mass.-based diagnostics and equipment giant said it agreed to sell the IDS unit to Veritas Capital Fund III LP, a New York-based private equity firm, for a $482 million net.
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. The deal is expected to close by the end of the year.
Chairman and CEO Robert Friel said the move is 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.
PerkinElmer 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.
The company also said its board of directors gave the green light to increasing its stock buyback plan by 13 million shares.
PKI shares were down 0.14 percent to $21.00 in after-hours trading.