Tektronix can grow faster with Danaher, CEO says

The purchase of Oregon's largest homegrown technology company by a conglomerate 10 times its size will help accelerate the growth of Tektronix Inc.
That's the assessment of CEO Rick Wills, who came up through the ranks since joining Tektronix in 1979 to lead the company for the past seven years.
Tektronix (NYSE: TEK) has agreed to be acquired by $11 billion, Washington, D.C.-headquartered Danaher Corp. (NYSE: DHR), in an all-cash deal valued at $2.8 billion. That's $38 per share, including Tektronix's debt and net of its cash holdings -- a premium of 34 percent over last week's closing price.
Beaverton-headquartered Tektronix, at $1.1 billion in annual revenue, will now have access to much greater capital resources that could help the business make more acquisitions to round out its technology and product line. Tektronix has made several acquisitions in recent years.
Tektronix will become part of Danaher Electronics, comprised of Fluke and Fluke Networks, based in Washington, D.C. That business is about the same size as Tektronix.
While some of Fluke's tools compete with some of Tektronix's, there's only about a 5 percent overlap, said Wills. That gives plenty of room for distributors who now sell both companies' products to start selling more of each company's products.
Danaher intends to keep both brands, said CEO Larry Culp during an early-morning conference call on Friday.
The fact that Tektronix builds "bleeding-edge" test and measurement equipment, while Fluke makes lower-end instruments used by field technicians, gives the two companies a chance to collaborate on new products, said Wills.
These are likely to be mid-priced tools for engineers working in well-established applications, rather than in leading-edge, new technologies.
Tektronix has a strong presence in Asia, while Fluke does not, as yet. Danaher's management "found that attractive," said Wills.
Danaher, which is extremely profitable, has developed a system for running its operations, based on Japanese auto company Toyota's famous system for removing cost and continuous improvement. That system will help Tektronix improve and grow, said Wills.
"We have all kinds of quality and continuous improvement programs, but we don't have their 20-year toolset that makes them profitable, year after year," said Wills.
It's inevitable that Danaher will evaluate Tektronix's operations for places where it can cut costs, including cutting some employees.
Wills says he can't concern himself with whether he will have a place in the merged company.
"I want to take myself out of this personally, and do the right thing for customers, employees and shareholders," he said.
credited by: bizjournals.com