Thermo expands with Kendro

WALTHAM, Mass.—In late January, Thermo Electron announced that it would dramatically enhance its product portfolio by acquiring Kendro Laboratory Products, a division of SPX Corp. The acquisition will cost the multinational instrument market leader $833.5 million in cash, subject to a post-closing balance sheet adjustment. To finance a portion of the purchase price, Thermo received a commitment for a credit facility of $600 million.

Kendro designs and manufactures a variety of laboratory products for use in sample preparation, processing, and storage, including incubators and ovens, freezers and refrigerators, and centrifuges. It marketed these items to industrial, academic, and clinical facilities under brand names like Heraeus, Revco, and Sorvall. In 2004, Kendro was estimated to have sales of $365 million.

While Thermo also carries basic support instrumentation, such as water baths, centrifuges, and vacuum driers, the company has largely developed its reputation on the basis of its more complex analytical instrumentation, in-cluding a long line of hyphenated spectrometry equipment, as well as chromatography instruments and LIMS.

The acquisition is just the latest such move for Thermo, which in the last two years has purchased LIMS specialist InnaPhase and laboratory products provider Jouan. These moves, like this one, extended Thermo's market reach and may remind people of a similar extension and consolidation that Thermo Electron experienced a few years ago when it brought many subsidiaries under the Thermo Electron umbrella.

For SPX, the sale of Kendro is just one of several such divestitures—the latest being Edwards Systems Technology fire safety systems to General Electric and BOMAG compaction equipment to Fayat—as the company begins to take a "good strategic look" at every company in the SPX portfolio to see how it can make SPX stronger, improving profitability for shareholders and associates. While Kendro has generated substantial profits and cash flow for SPX, the company expects the sale will unlock additional value for SPX shareholders.

By early March, Thermo an-nounced that the Federal Trade Commission had granted early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. At press time, the closing of the transaction, however, remain-ed subject to other conditions and regulatory approvals which prevented officials from either Thermo or Kendro from commenting for this story.