Business
Thermo Fisher will buy microscope maker FEI for $4.2 billion.
Reuters reports:
Thermo Fisher Scientific Inc (TMO.N), the world's largest maker of scientific instruments, said it would buy FEI Co (FEIC.O) for about $4.2 billion to gain access to the company's electron microscopy technology that helps study proteins. The $107.50 per share offer represents a premium of 13.7 percent to FEI's Thursday close of $94.58. FEI shares rose to $107 in premarket trading on Friday. The deal comes two months after Thermo Fisher bought gene-sequencing products maker Affymetrix Inc as the company looks to boost its product offerings with smaller, complementary acquisitions. Thermo Fisher told analysts last week that it expected to deploy about $12 billion of capital over the next three years for these deals, which could drive a $3 billion upside in revenue, Cowen and Co analysts wrote in a note. The analysts also estimated a 75 cent per share benefit to earnings in 2019. Hillsboro, Oregon-based FEI designs, makes and supports high-performance electron microscopes that provide images and information at micro, nano and picometer scales which are used by life sciences companies to make discoveries. The electron microscopy platform complements Thermo Fisher's mass spectrometry systems which help identify the chemical constitution of a substance. The deal also allows Thermo Fisher to utilize FEI's nano-prototyping technologies to develop devices which are increasingly getting smaller and more complex.
The Wall Street Journal notes:
Analysts at Leerink called the acquisition a “logical fit” since “electron microscopy represented a gap in Thermo’s scientific instruments offering.” FEI, Hillsboro, Ore., has more than 3,000 employees world-wide with operations primarily in Europe and the U.S. Mr. Casper said the business, which posted $930 million in revenue last year, will immediately add to Thermo Fisher’s earnings. The deal is expected to close by early 2017 and add $1 billion in revenue and 30 cents a share to earnings in the first year. Thermo Fisher in March completed its acquisition of Affymetrix Inc. for $1.3 billion, following the genetics firm’s rejection earlier of a higher rival bid submitted by former executives of the company. It previously added Life Technologies Corp. in February 2014 for $13.6 billion and allergy-testing firm Phadia AB for EUR2.5 billion in 2011. On Thursday, Mr. Casper said the FEI deal is part of $12 billion Thermo Fisher plans to spend on acquisitions through 2019. “We’ll continue to be active,” he said.
“We view this acquisition as a nice tuck-in,” Ross Muken, an analyst at Evercore ISI, said in a research note. “FEI is a unique high end instrumentation asset with leverage to the highly attractive applied markets.” Thermo Fisher has been acquiring genetic testing, diagnostics and research assets through a series of deals. In April, it bought Affymetrix Inc. for about $1.1 billion, adding technology used by scientists and biologists to analyze specimens at the cellular and genetic level. And in 2014, it paid $15 billion for Life Technologies Corp., a DNA-sequencing company.
