PerkinElmer to Sell Off Units in Deals Worth $400m to Focus on Life Sciences
Posted on: Friday, 7 October 2005, 15:00 CDT
By Ross Kerber, The Boston Globe
Oct. 7--PerkinElmer Inc. said yesterday it plans to sell businesses worth around $400 million to focus on faster-growing life sciences areas.
The steps by the Wellesley laboratory equipment maker represent a judgment that its traditional aerospace and semiconductor industry customers are not as promising a growth area as the pharmaceutical, biotechnology, and medical device sectors on which it will focus.
They also mark the latest strategic move by PerkinElmer chief executive Gregory L. Summe, who has transformed the company that was largely a government contractor known as EG&G Inc. when he arrived in 1998.
PerkinElmer's new direction "gives us a cleaner profile for our investors," Summe said in a telephone interview.
No Massachusetts workers will be affected by the move, Summe said.
Yesterday, PerkinElmer said it will sell its aerospace unit in Maryland with about 900 workers to Eaton Corp. of Cleveland for $333 million. It also is in talks with partners it would not identify to sell its semiconductor business in Florida and its fluid testing business in Texas, which together should bring in another $67 million or so.
Together, the three units make up PerkinElmer's "fluid sciences" business unit, which accounted for $244 million of its $1.06 billion in revenue last year. Fluid sciences had revenue of $180 million in 2003, but the businesses are in cyclical areas that took major hits as semiconductor and aerospace orders declined after 2001, Summe said.
PerkinElmer had previously tried to sell the areas but took them off the market because of falling sales.
A spokesman for Eaton said the company has not determined whether layoffs will follow the change in control.
Summe said the deals should help employees. "I think they will go to strategic buyers," he said. "They have been low on the investment priority list for us, and will go to strategic buyers who will be invested in the business."
The deal was revealed after the close of trading yesterday. PerkinElmer shares are down 8 percent this year.
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PKI, ETN,
Source: The Boston Globe
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