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Preliminary and subject to further review and change. See final page for important information about this document.Copyright 2010 Fortuna Advisors LLC. All Rights Reserved.

Serial Acquirer Case Study:

Danaher Corporation

Copyright 2010 Fortuna Advisors LLC. All Rights Reserved.

Overview

• Despite the claim that acquisitions destroy value certain

companies excel as acquirers and deliver outstanding value

for shareholders.

• We studied the relationship between long term total

shareholder returns (TSR) and different acquisition strategies

and a variety of deal characteristics.

– The only trait that consistently has a strong positive

relationship with long term TSR across each industry is

acquisition frequency.

• We call them Serial Acquirers and many generate

outstanding results by being better at planning, executing

and integrating acquisitions than their peers.

• Danaher Corporation is one of the world’s best serial acquirers

2


Danaher’s M&A Strategy Emphasizes Returns

• Even during the

downturn in 2008 and

2009 Danaher

delivered Cash Flow in

excess of the required

return on all capital

• This strategy creates

value for shareholders

and demonstrates the

benefits of

continuously

redeploying capital

into positive returns0%

4%

8%

12%

16%

$0

$400

$800

$1,200

$1,600

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

Danaher's Fundamental Performance

Acquisition Residual Cash Earnings Acquisition Residual Cash Margin

3

Source: Fortuna Advisors Analytics, using CapitalIQ Data

Note: Acquisition Residual Cash Earnings (ARCE) is EBITDA + Rent + R&D Less Taxes Less Capital Charge Including Goodwill & Intangibles

Acquisitions Residual Cash Margin (ARCM) is ARCE as a % of Revenue


Danaher Creates Value Through Superior Returns and

Growth


Note: Residual Cash Margin (RCM) is EBITDA + Rent + R&D Less Taxes Less Capital Charge (Acquisition RCM includes Goodwill and Intangibles in the Capital Charge

4

• Danaher’s M&A

strategy relies on

being able to operate

the target company in

a more efficient way

• The Company’s

Residual Cash Margin

(with and without

intangibles) has been

consistently positive

and relatively stable

• When a business is

run this efficiently,

growth is

tremendously

valuable

0%

5%

10%

15%

20%

25%

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Residual Cash Margin

Residual Cash Margin Acquistion Residual Cash Margin

-20%

0%

20%

40%

60%

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Revenue Growth

-200%

0%

200%

400%

600%

800%

1,000%

1,200%

1,400%DanaherS&P 500S&P 500 Machinery

Pacific Scientific

Fluke Hach

American Precision

Kollmorgen

Maconi Data Systems

Radiometer

Sybron Dental

Kavo Dental

ChemTreat

TektronixMDS Analytical

Technologies

Molecular

Devices

Applied

Biosystems


The Danaher Business System (DBS) Focuses

Management on the Relentless Pursuit of Efficiency

5

• DBS is a culture

where every

employee from CEO

to the shop floor is

responsible for

findings ways to

improve the way

work gets done

• Danaher has held

margins stable

despite the recent

downturn

• More remarkable is

the Company’s

ability to maintain

low levels of Asset

Intensity


Note: Gross Business Returns is Gross Cash Earnings (EBITDA + Rent + R&D Less Taxes) Divided by Gross Operating Assets (NWC, Gross PP&E, Capitalized Rent and R&D)

Asset Intensity is Gross Operating Assets Divided by Revenue

0%

10%

20%

30%

40%

50%

60%

70%

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Gross Business Return

Gross Business Return Acquisition Gross Business Return Required Return

0.0x

0.2x

0.4x

0.6x

0.8x

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

Asset Intensity

0%

5%

10%

15%

20%

25%

30%

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

EBITDAR Margins


Danaher Tends to Acquire Lagging Companies in

Attractive Sectors

6

Medical Technology: 27% Young Innovations (YDNT), Schein Henry (HSIC), Sybron Dental (SYD), Patterson (PDCO), Dentsply (XRAY).

Electronic Test: 23%Visual Networks (VNWK), Microtest(MTST), Fluke (FLK), Mettler Toledo (MTD), Ametek (AME), Fisher Scientific (FSH), Roper Industries (ROP), Tektronix (TEK).

Motion: 20%Kollmorgen (KOL), Pacific Scientific (PSX), American Precision (APR), Joslyn(JOSL), Baldor Elect. (BEZ), Spectris(SXS), Parker-Hannifin (PH), Rockwell

Automation (ROK).

Environmental: 15% Ionics (ION), Pall Corp (PLL), Hach(HACH), Lifschultz (LIFF), Esco Tech (ESE), Cuno (CUNO), Pentair (PNR).

Sector Profitability and Competitive Landscape

Competitively

Disadvantaged

5%

10%

15%

20%

25%

30%

35%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

LFY

Se

cto

r M

ed

ian

Gro

ss B

usin

ess R

etu

rn

LFY Company Gross Business Return

Sector Median

SX

S

RO

P

FSH

PD

CO

SYD

XRA

YH

SIC

YDN

T

AM

EM

TDTEK

VN

WK

MTST

FLK

RO

K

BEZPH

JOSL

PSX

AP

R

KO

L

ESE

PN

R

LIFFPLL

ION

CUN

OH

AC

H

Competitively

Advantaged

Source: Fortuna Advisors Analytics, using CapitalIQ dataNote: Danaher acquired Gendex from XRAY not the entire company


Danaher’s Public Targets Tend to have Higher Gross

Margins, SG&A and most Notably Asset Intensity

7

Source: Fortuna Advisors Analytics, using CapitalIQ data

Danaher 2009 25% 48% 27% 0.54x 41% 3.68x 16%

Tektronix 2007 36% 60% 31% 1.56x 21% 1.12x 18%

Sybron Dental Specialties 2005 25% 56% 37% 0.81x 26% 3.63x 13%

Visual Networks 2004 28% 70% 48% 1.58x 18% 0.72x 12%

Lifschultz Industries 2000 18% 49% 34% 0.88x 22% 1.25x 11%

Kollmorgen Corporation 1999 12% 29% 22% 0.89x 14% 1.09x 3%

American Precision Industries 1998 14% 31% 22% 0.96x 12% 0.89x 3%

Hach Company 1998 26% 49% 28% 1.43x 14% 1.11x 7%

Fluke Corporation 1997 25% 54% 35% 1.39x 15% 0.72x 7%

Pacific Scientific Company 1996 13% 31% 22% 1.07x 12% 1.19x 2%

Acquired Target Median 25% 49% 31% 1.07x 15% 1.11x 7%

Gross Business

Return

Enterprise Value

to Gross Asset

Residual Cash

MarginDanaher Acquired Companies Time Period

EBITDARR

Margin

Gross

Margin

SG&A % of

Sales

Asset

Intensity

Danaher Peer Median 2009 18% 27% 20% 0.95x 19% 1.69x 8%

Danaher Peers includes Textron, Tyco, 3M, Ingersoll-Rand, Illinois Tool Works, Honeywell, and United Technologies


Like an Astute Value Investor Danaher has Demonstrated

the Ability to Buy Companies Trading at a Discount

8

Source: Fortuna Advisors Analytics, using CapitalIQ data.

Note: “Long-Term Market Norm” based on the historical relationship between Gross Business Returns and Market Multiples for the 1,000 largest non-financial US Companies

0.0x

0.5x

1.0x

1.5x

2.0x

2.5x

3.0x

3.5x

4.0x

4.5x

5.0x

0% 5% 10% 15% 20% 25% 30% 35% 40%

En

terp

ris

e V

alu

e t

o G

ross A

ssets

Gross Business Return

Tektronix

Lifschultz

Visual

NetworksFluke

Hach

Kollmorgen

Pacific

Scientific

American

Precision Microtest

Joslyn

Sybron

Dental

“Long term market norm”

Post –Transaction Announcement

Pre–Transaction Announcement

DanaherPercent of Targets at a Discount

Pre-Announcement91%

Median Target Premium/Discount

Pre-Announcement-40%

Median Target Premium/Discount

Post-Announcement-21%


Appendix


Fortuna Advisors PartnersExperts in Strategy, Finance and Value Management

Gregory V. MilanoManaging Partner, Founder & CEO

• 25 years of experience including 17 years in value based management as Partner and President of Stern Stewart & Co., and Managing Director and Co-Head of the Strategic Finance Group at Credit Suisse

• Industry thought leader and advisor to senior executives on business and financial strategies designed to increase share prices, financial management processes to support value based strategies and a strong focus on behavioral economics to align the interests of managers with those of shareholders.

John R. CryanPartner & Co-Founder

• 10 years of experience including value management at Credit Suisse and Accenture

• Extensive experience in Enterprise Performance Management, developing and implementing value-based strategies into financial management and decision making processes

Steven C. TreadwellPartner

• 15 years of experience including 9+ years of value management experience at HOLT and Credit Suisse

• Extensive work with some of the largest companies in the retail, consumer products and industrial sectors incorporating shareholder insights into the client’s strategic decision process

10


Focus and Discipline of Postmodern Corporate Finance

11

DiagnosticA View from the Investors’ Shoes

Internal Capitalism Audit

Process Enhancement

Capital Allocation Approvals

Budgeting and Forecasting

Performance Measures & Key

Value Drivers

Value Based Strategic Planning

Incentives to Simulate

Ownership

Training & Development

Strategic Advice

Capital Deployment Strategy

Business Unit/Portfolio

Evaluation

Strategic M&APlanning & Valuation

Strategic Plan Evaluation

Strategy AlignmentInvestor

Communication & Targeting

These materials have been provided to you by Fortuna Advisors LLC in connection with an actual or potential mandateor engagement and may not be used or relied upon for any purpose other than as specifically contemplated by awritten agreement with Fortuna Advisors LLC. In addition, these materials may not be disclosed, in whole or in part, orsummarized or otherwise referred to except as agreed in writing by Fortuna Advisors LLC. The information used inpreparing these materials was obtained from or through you or your representatives or from public sources. FortunaAdvisors LLC assumes no responsibility for independent verification of such information and has relied on such informationbeing complete and accurate in all material respects. To the extent such information includes estimates and forecasts offuture financial performance (including estimates of potential cost savings and synergies) prepared by or reviewed ordiscussed with the managements of your company and/or other potential transaction participants or obtained frompublic sources, we have assumed that such estimates and forecasts have been reasonably prepared on bases reflectingthe best currently available estimates and judgments of such managements (or, with respect to estimates and forecastsobtained from public sources, represent reasonable estimates). These materials were designed for use by specificpersons familiar with the business and the affairs of your company and Fortuna Advisors LLC assumes no obligation toupdate or otherwise revise these materials. Nothing contained herein should be construed as tax, accounting or legaladvice. You (and each of your employees, representatives or other agents) may disclose to any and all persons, withoutlimitation of any kind, the tax treatment and tax structure of the transactions contemplated by these materials and allmaterials of any kind (including opinions or other tax analyses) that are provided to you relating to such tax treatmentand structure. For this purpose, the tax treatment of a transaction is the purported or claimed U.S. federal income taxtreatment of the transaction and the tax structure of a transaction is any fact that may be relevant to understanding thepurported or claimed U.S. federal income tax treatment of the transaction.


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