The Successful Investor Hotline – Friday, September 4, 2009

Article Excerpt

MDS INC., $8.37, Toronto symbol MDS, rose nearly 30% this week after it announced several moves aimed at unlocking its value. The company has three businesses: MDS Analytical Technologies sells mass spectrometers that detect and measure substances in blood and other patient samples; MDS Pharma Services conducts contract-drug research for pharmaceutical companies; and MDS Nordion supplies medical isotopes for cancer research. As a result of a strategic review, MDS plans to sell its pharma-services division, and this week it agreed to sell its analytical-technologies segment. These sales will allow MDS to focus solely on its isotope business. Danaher Corp. (New York symbol DHR) will pay MDS $650 million (all amounts except share price in U.S. dollars) for the analytical-technologies division. The company plans to use $400 million to $450 million of this to buy back shares. MDS’s current market cap is $1 billion (Canadian), so this will probably cut the number of outstanding shares by about half. MDS will put the remaining cash…

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