v3.26.1
Acquisitions
 6 Months Ended
Jun. 26, 2026
Business Combination, Asset Acquisition, Transaction between Entities under Common Control, and Joint Venture Formation [Abstract]  
Acquisitions ACQUISITIONS
The Company continually evaluates potential acquisitions that either strategically fit with the Company’s existing portfolio or expand the Company’s portfolio into a new and attractive business area. The Company has completed a number of acquisitions that have been accounted for as purchases and have resulted in the recognition of goodwill in the Company’s financial statements. This goodwill arises because the purchase prices for these businesses exceed the fair value of acquired identifiable net assets due to the purchase prices reflecting a number of factors including the future earnings and cash flow potential of these businesses, the multiple to earnings, cash flow and other factors at which similar businesses have been purchased by other acquirers, the competitive nature of the processes by which the Company acquired the businesses, the avoidance of the time and costs which would be required (and the associated risks that would be encountered) to enhance the Company’s existing product offerings to key target markets and enter into new and profitable businesses and the complementary strategic fit and resulting synergies these businesses bring to existing operations.
The Company makes an initial allocation of the purchase price at the date of acquisition based upon its understanding of the fair value of the acquired assets and assumed liabilities. The Company obtains the information used for the purchase price allocation during due diligence and through other sources. In the months after closing, as the Company obtains additional information about the acquired assets and liabilities, including through tangible and intangible asset appraisals, and learns more about the newly acquired business, it is able to refine the estimates of fair value and more accurately allocate the purchase price. The fair values of acquired intangibles are determined based on estimates and assumptions that are deemed reasonable by the Company. Significant assumptions include the discount rates and certain assumptions that form the basis of the forecasted results of the acquired business including earnings before interest, taxes, depreciation and amortization (“EBITDA”), revenue, revenue growth rates, royalty rates and technology obsolescence rates. These assumptions are forward looking and could be affected by future economic and market conditions. The Company engages third-party valuation specialists who review the Company’s critical assumptions and calculations of the fair value of acquired intangible assets in connection with significant acquisitions. Only facts and circumstances that existed as of the acquisition date are considered for subsequent adjustment.
The Company is continuing to evaluate certain pre-acquisition contingencies including property, plant and equipment, acquired intangible assets, certain acquisition-related liabilities and legal contingencies associated with the acquisition of Masimo Corporation (“Masimo”) and is also in the process of obtaining valuations of certain acquisition-related assets and liabilities in connection with the acquisition. The Company will make appropriate adjustments to the purchase price allocations, if any, prior to completion of the measurement periods, as required. Refer to Note 12 for additional information related to legal contingencies from the acquisition.
On June 10, 2026, the Company acquired Masimo by acquiring all of the outstanding shares of Masimo’s common stock for a cash purchase price of approximately $9.8 billion, or $180.00 per share, net of cash acquired (the “Masimo Acquisition”). Masimo develops and produces monitoring technologies, which include innovative measurements, sensors and patient monitors, serving primarily healthcare customers and is now part of the Company’s Diagnostics segment. Masimo generated revenues of approximately $1.5 billion in 2025. The acquisition of Masimo has provided, and is expected to provide, additional sales and earnings opportunities for the Company by expanding product line diversity, including new product offerings supporting acute care settings. The Company financed the Masimo Acquisition using cash on hand and proceeds from the issuance of long-term debt and commercial paper. The Company preliminarily recorded approximately $5.0 billion of goodwill related to the Masimo Acquisition.
The following summarizes the estimated fair values of the assets acquired and liabilities assumed at the date of acquisition ($ in millions):
Trade accounts receivable$232 
Inventories667 
Property, plant and equipment355 
Goodwill4,960 
Other intangible assets, primarily technology, customer relationships and trade names4,844 
Trade accounts payable(77)
Deferred tax liabilities(1,088)
Other assets and liabilities, net(5)
Net assets acquired9,888 
Less non-cash consideration(45)
Net cash consideration$9,843 
In connection with the acquisition, the Company replaced unvested restricted stock held by Masimo employees with Danaher restricted stock. Of the total fair value, $45 million was attributable to pre-acquisition service and was included in the purchase price. Transaction costs related to the Masimo Acquisition were $34 million and $51 million for the three and six-month periods ended June 26, 2026, respectively. The Company’s earnings for the three and six-month periods ended June 26, 2026 also reflect the pretax impact of $74 million of nonrecurring acquisition date fair value adjustments to inventory, the settlement of pre-acquisition share-based payment awards and change-in-control payments.
Pro Forma Financial Information
The unaudited pro forma information for the periods set forth below gives effect to the Masimo Acquisition as if it had occurred as of the beginning of the comparable prior annual reporting period, including the results from operations for the acquired business as well as the impact of assumed financing of the transaction and the impact of the purchase price allocation (including the amortization of acquired intangible assets). The pro forma information is presented for informational purposes only and is not necessarily indicative of the results of operations that actually would have been achieved had the acquisitions been consummated as of that time ($ in millions, except per share amounts):
 Three-Month Period EndedSix-Month Period Ended
 June 26, 2026June 27, 2025June 26, 2026June 27, 2025
Sales$6,511 $6,307 $12,866 $12,420 
Net earnings
900 372 1,878 1,131 
Diluted net earnings per common share
1.27 0.52 2.65 1.57 
The three and six-month periods ended June 26, 2026 unaudited pro forma net earnings set forth above were adjusted to exclude the pretax impact of $74 million of nonrecurring acquisition date fair value adjustments to inventory, the settlement of pre-acquisition share-based payment awards and change-in-control payments, in each case related to the Masimo Acquisition, reflecting these second quarter 2026 charges as if the acquisition had occurred as of January 1, 2025. The six-month period ended June 27, 2025 unaudited pro forma net earnings were adjusted to include the impact of these items. In addition, acquisition-related transaction costs of $34 million and $51 million for the three and six-month periods ended June 26, 2026, respectively, were excluded from pro forma net earnings.