Contract manufacturing giant Catalent (NYSE:CTLT) is rumored to be the target of a Danaher (NYSE:DHR) acquisition, according to a Bloomberg report.

CTLT shares were trading at $72.15 in afternoon trading on Tuesday, an increase of 58.75% over its valuation at the beginning of 2023.

The company’s market cap is close to $13 billion.

If the deal moves forward, it could help Danaher compete against Thermo Fisher Scientific (NYSE:TMO), whose market cap is $226.36 billion.

Two diversified life sciences companies

Catalent offers a range of advanced delivery technologies, development, and manufacturing services for drugs, biologics, gene therapies and consumer health products. Its offerings are diverse, spanning oral, topical, inhalation and injectable drug delivery as well as biologics.

Thermo Fisher Scientific’s traditional focus is on analytical instruments, reagents and services for research, analysis and diagnostics. The company has a variety of life science customers, including those specializing in biopharmaceuticals and biotechnology.

Thermo Fisher acquired Patheon, a contract development and manufacturing organization CDMO, in 2017 and PPD, a contract research organization, in 2021.

Last year was hard for Catalent

2022 was a rough year for Catalent. The company’s stock fell from $115.46 at the beginning of the year to $52.25 at the end of it.

At the end of 2022, the company laid off 400 temporary and full-time workers in Bloomington, Indiana and over 210 employees in Texas and Maryland.

Catalent also stopped construction on the Vaccine Manufacturing and Innovation Centre near Oxford in the United Kingdom, according to media reports.

In Q4 2022, Catalent reported $1.15 billion in revenue, a 5.6% decrease compared to the previous year. In addition, the earnings per share (EPS) for the same period were $0.67, a drop from the prior year’s EPS of $0.90.

Nevertheless, the reported revenue exceeded the Zacks Consensus Estimate of $1.12 billion, beating expectations by 2.41%. EPS, however, fell short of the consensus estimate of $0.72, resulting in a miss of –6.94%.