PerkinElmer sells Illumination and Detection business to Veritas Capital for $500 million

PerkinElmer sells lighting, sensor unit for $500M

WALTHAM, Mass. — Medical instrument maker PerkinElmer Inc. on Tuesday said it is selling its Illumination and Detection Solutions for $500 million.

The 3,000-employee unit will be sold to private equity firm Veritas Capital Fund III LP in an all-cash deal.

The unit, which has 14 manufacturing facilities that make specialty lighting and sensor components and other products for in the health, environmental, and security fields. The business is expected to generate about $300 million in revenue this year.

Robert Friel, chairman and CEO of PerkinElmer, said the sale will reduce the company’s complexity and free up capital to invest in the human health and environmental health markets. The deal will also reduce the company’s exposure to more cyclical end markets, he said.

The company will report the unit’s results as discontinued operations until the sale is complete, which is expected by the end of the year.

As a result, PerkinElmer reduced its full-year 2010 forecast, and now expects to post adjusted profit between $1.24 and $1.29 per share, down from its prior projection for adjusted profit of $1.49 to $1.54 per share. Analysts surveyed by Thomson Reuters, on average, were expecting profit of $1.52 per share prior to the sale announcement.

For the third quarter 2010, PerkinElmer now expects adjusted profit between 27 cents and 29 cents per share. Wall Street was expecting 35 cents per share before the sale.

The company has not issued guidance for 2011, but said the deal will cut 8 to 10 cents per share from its results, or between 5 and 6 percent of the current Thomson estimate of $1.70 per share.

PerkinElmer also said its board increased its stock repurchase program to 13 million from 10 million.

In aftermarket electronic trading, PerkinElmer shares slipped a penny to $21, after closing down 3 cents at $21.01.