Danaher Corp. (DHR) is reportedly closing in on a roughly $9.9 billion acquisition of Masimo Corp. (MASI), and if you've been following the medical device maker's saga over the past few years, you know this comes after quite the corporate drama.
According to a Financial Times report, a deal could be announced as early as Tuesday, assuming nothing falls apart at the last minute. The price tag represents a hefty premium to Masimo's nearly $7 billion market capitalization as of Friday's close, which tells you something about what Danaher sees in this troubled company.
How Activists Remade Masimo
This potential acquisition is the culmination of a corporate shakeup that started two years ago when activist hedge fund Politan Capital Management decided Masimo needed new leadership. The activists led a proxy contest that ended with founder Joe Kiani getting ousted as board chair. Kiani eventually stepped down as CEO entirely, though he still holds about 5% of the company.
Politan, founded by Quentin Koffey, now controls close to 9% of Masimo after securing four board seats. The activists had a point: Masimo's stock has tanked 50% over five years, and some of management's strategic decisions raised serious questions about where the company was headed.
Strategic Stumbles and Apple Drama
Case in point: Masimo's $1 billion acquisition of Sound United, which owns consumer audio brands. Activist investors rightfully asked what a medical device company was doing buying audio equipment businesses. It was a head-scratching move away from Masimo's core healthcare focus, and it didn't work out well. In 2025, Masimo sold off its wearables business for just $350 million, a brutal markdown from what they originally paid.
Meanwhile, Masimo has been tied up in a long-running patent dispute with Apple Inc. (AAPL) over smartwatch technology. That legal battle has added another layer of distraction to an already challenging period for the company.
At its Investor Day in December 2025, Masimo's management tried to refocus the narrative, projecting 7%-10% annual revenue growth through 2028 and operating margins hitting around 30%. Those are solid targets, but investors have been waiting to see if the newly constituted board can actually deliver.
Danaher's Acquisition Strategy
For Danaher, this deal fits a well-established playbook. The company has built its growth strategy around acquisitions over the past 25 years, consistently buying and integrating businesses in the life sciences and diagnostics space. Danaher's market cap currently sits around $150 billion, though its stock has fallen 28% from its September 2021 peak after the COVID-19 pandemic boom faded.
Danaher recently reported fourth-quarter 2025 sales of $6.84 billion, up 4.5% year-over-year and slightly ahead of the $6.81 billion consensus. The company is guiding for fiscal 2026 adjusted earnings between $8.35 and $8.50 per share, right in line with the $8.42 consensus estimate.
What Masimo Is Worth Now
Masimo is scheduled to report fourth-quarter earnings on February 26, but the company already released preliminary numbers in January. Fourth-quarter revenue came in around $411 million, beating the $407.58 million consensus. For full fiscal 2025, Masimo expects sales of approximately $1.523 billion.
The company is projecting adjusted earnings of $1.54 per share for the quarter, factoring in the impact of new tariffs. For the full fiscal 2025, Masimo expects at least $5.55 per share in adjusted earnings, ahead of the $5.48 consensus.
On Tuesday morning, investors were clearly excited about the acquisition prospects. Masimo shares jumped 34.51% to $175.06 in premarket trading. Danaher shares, meanwhile, dropped 5.22% to $201.48, which is typical when a buyer announces a major acquisition at a premium price.
If this deal closes, it will mark the end of a turbulent chapter for Masimo and the beginning of a new one under Danaher's ownership. For Danaher, it's another bet that it can take a struggling company, apply its operational expertise, and turn it into a profitable addition to its portfolio.
