Fortive reaches its acquisition target allocation of USD 1.5 bn for 2017
Corporation (FTV US, HOLD, TP USD 70m, part of US Top picks list and Industrials most favored list) announced that it has entered into a definitive agreement to acquire Landauer (LDR US, not rated), provider of subscription based radiation detection and outsourced medical physics services for an enterprise value of USD 770 m or an implied EV/sales of 5.3x. The high multiple likely reflects the fact that more than 80% of LDR’s revenue is recurring in nature, which will thereby reduce the cyclicality of Fortive’s Field Solutions platform that has 10% recurring revenues. With this acquisition, FTV has also reached its M&A target allocation of USD 1.5 bn for 2017 with plans for additional deployment of USD 3.5 bn- 5.5 bn towards M&A between 2018–2021. The stock remains on our US Top Pick and Industrial most favored lists.