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Pall acquiring unit of Conn. firm ATMI for $185M

Port Washington-based filtration company, Pall Corp., has agreed

Port Washington-based filtration company, Pall Corp., has agreed to buy the life sciences business of ATMI Inc. for $185 million, the companies announced Monday, Dec. 23, 2013. Credit: Handout

Filtration company Pall Corp. has agreed to buy the life sciences division of ATMI Inc. for $185 million, the companies announced Monday.

The transaction, which is subject to regulatory approval, was Pall's second life sciences deal in six months, following the purchase of Dutch firm Medistad Holding B.V. in July.

Danbury, Conn.-based ATMI employs about 195 people in its life sciences unit in Hoegaarden and Brussels, Belgium, and Bloomington, Minn.

"This acquisition immediately strengthens our offering and broadens our already extensive portfolio of advanced solutions for biopharmaceutical customers," Pall chief executive Larry Kingsley said in a statement.

The deal is expected to close in the first calendar quarter and to add $20 million to $30 million to Pall's fiscal 2014 revenue, but trim 5 cents to 8 cents from earnings per share, the company said. Pall reaffirmed its pro forma earnings per share forecast for fiscal 2014 at $3.30 to $3.50.

Shares of Pall, based in Port Washington, edged down 9 cents Monday to close at $84.91.

Rick Eastman, an analyst with Robert W. Baird & Co., said that the acquisition fits Pall's strategy of expanding its share of single-use products in the life sciences industry.

Eastman estimated the two new acquisitions will increase Pall's sales of single-use products from $60 million to $70 million per year to about $140 million.

"That's pretty strategic," he said.

Pall's single-use, or disposable, products include cell culture equipment and virus removal filters.

Pall is holding $967 million in cash, $920 million of which is offshore, Eastman said, and the company likely would use the offshore cash to pay for the ATMI unit, avoiding taxes assessed on money repatriated to the United States.

The ATMI deal may not be Pall's last.

At the Credit Suisse Global Industrials Conference earlier this month, Pall chief financial officer Akhil Johri said the company has a "very robust" merger and acquisition pipeline.

Johri said that "organic investments" top Pall's list of priorities, but mergers and acquisitions (M&A) "is a close second."

Still, Johri said Pall is determined to remain disciplined and demand good returns on investment.

"Remaining patient on M&A is critical," he said.

Pall's customers include hospitals, laboratories, airlines and municipal water suppliers.

Shares of ATMI, whose core business provides materials used in making microelectronics, climbed 2.88 percent to close at $30.02.

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