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Thermo Fisher Scientific to acquire Life Technologies for more than $13 billion
WALTHAM, Mass. and CARLSBAD, Calif.—Touting phrases like "unrivaled industry leader" and "innovation leadership," Thermo Fisher Scientific and Life Technologies Corp. announced April 15 that they have signed a definitive agreement for Thermo Fisher to acquire Life Technologies for $76.00 in cash per fully diluted common share, or approximately $13.6 billion, plus the assumption of net debt at close ($2.2 billion as of year end 2012).
The transaction has been approved by both companies' boards of directors, and will create, they say, "an unrivaled leader in serving research, specialty diagnostics and applied markets," noting that the combination builds on both companies' technological strengths to accelerate results for life sciences customers working in proteomics, genomics and cell biology.
"[This transaction] creates the ultimate partner for our customers and significant value for our shareholders," said Marc N. Casper, president and CEO of Thermo Fisher Scientific. "The acquisition of Life Technologies enhances all three elements of our growth strategy: technological innovation, a unique customer value proposition and expansion in emerging markets."
He maintains that post-merger, customers in research and applied markets will be able to achieve even higher levels of innovation and productivity by working with the combined company.
"We're especially excited about the new opportunities we will have to leverage our complementary offerings, fueled by a shared commitment to continuous innovation," Casper said. "For our shareholders, we expect the transaction to generate attractive financial returns, as well as significant and immediate accretion to our adjusted EPS."
Life provides products and services for clients conducting scientific research and genetic analysis, as well as those in applied markets, such as forensics and food safety testing. With 2012 revenues of $3.8 billion, its comprehensive offerings includes a broad range of reagents, consumables, instruments and systems. Life's leading technologies are protected by approximately 5,000 patents and licenses, and the company boasts an "expansive commercial presence and global footprint," with more than 10,000 employees serving its customers around the world.
"This transaction brings together two companies intent on accelerating innovation for our customers and achieving greater success in a highly competitive global industry," said Gregory T. Lucier, chairman and CEO of Life Technologies. "Further, this combination delivers immediate and significant cash value to our stockholders and represents a successful conclusion to the board's strategic review to enhance stockholder value and develop an even stronger future for Life Technologies. We look forward to joining forces with the outstanding team at Thermo Fisher, which shares our commitment to customers, employees and the communities we serve."
The two companies anticipate that Life Technologies' president and chief operating officer, Mark P. Stevenson, will have a significant leadership role in the combined company. In addition, Thermo Fisher intends to elect a member of the Life Technologies board of directors to its board.
Life Technologies' extensive offering of consumables for genomics and molecular and cell biology and its well-known next- generation sequencing capabilities, among other strengths, are expected to combined well with Thermo Fisher's leading offerings in analytical technologies and specialty diagnostics, to "create new opportunities to support the convergence of life sciences tools and diagnostics."
The companies also anticipate that Life's transaction model, in which more than half of its orders are made online through an e-commerce platform, will combine with Thermo Fisher's extensive research and healthcare customer channels to create a world-class commercial infrastructure.
Furthmore, the combined company would also build on a strong foothold in Asia-Pacific, particularly in China, to meet increasing customer demand in life sciences and healthcare.
The acquisition of Life presents the opportunity for $275 million of adjusted operating income synergies in year three following the close, the companies say, consisting of $250 million of cost synergies and $25 million of revenue synergies. In addition, Thermo Fisher expects the transaction to be significantly and immediately accretive to adjusted EPS.
SOURCE: Thermo Fisher/Life Technologies news release