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WALTHAM, Mass. & UPPSALA, Sweden—Thermo FisherScientific Inc. and Phadia have signed a definitive agreement by which ThermoFisher will acquire Phadia from Cinven, a European private equity firm, for2.47 billion euros (about $3.5 billion) in cash. The transaction is expected tobe immediately accretive to Thermo Fisher's adjusted earnings per share thisyear, and in 2012, the acquisition is expected to be accretive by $0.26 to$0.30 per share. Thermo Fisher expects to facilitate the transaction usingproceeds from the committed debt financing from Barclays Capital and cash onhand. The transaction is subject to customary closing conditions and thecompletion is expected in the fourth quarter of 2011.
 
"The acquisition of Phadia is a major step forward in ourstrategy to enhance Thermo Fisher's global presence in specialty diagnostics,one of our key growth platforms," says Marc N. Casper, president and chiefexecutive officer of Thermo Fisher. "This transaction will provide ThermoFisher with leading allergy and autoimmunity diagnostic testing technologiesthat expand our specialty diagnostics offerings." 
 
Phadia is a leader in the market of allergy and autoimmunitydiagnostics, developing, manufacturing and marketing blood-test systems. Itleads the global market for in-vitroallergy diagnostics and is also a leader in Europe's autoimmunity diagnosticsmarket. The company's two leading brands are ImmunoCAP, for allergy tests, andEliA, for autoimmunity tests. Phadia will become part of Thermo Fisher'sSpecialty Diagnostics Business within the Analytical Technologies Segment.After the acquisition, Thermo Fisher expects Phadia to make up 28 percent ofthe Specialty Diagnostics, with specialty assays, microbiology and anatomicalpathology making up 29 percent, 23 percent and 20 percent of the sector, respectively.
 
"Thermo Fisher brings Phadia a significant opportunity togrow as part of the world leader in serving science," says Magnus Lundberg,Phadia's chief executive officer. "We share a culture of innovation and astrong focus on customers, and I am confident that this is a winningcombination for our employees and customers around the world."
 
 
The company "enhances our leadership in specialtydiagnostics," Thermo Fisher noted when discussing the acquisition in a companypresentation on the deal. The allergy-testing market is a high-growth sector,and in-vitro allergy testing is growingat a rate of 9 percent globally. Approximately one in five people in North Americaand Europe suffer from various allergies, and with the lack of penetration inthe U.S. and emerging markets, Thermo Fisher noted that Phadia is "wellpositioned for significant growth." Autoimmunity is already a large concern andsegment in the healthcare industry, and more than 100 million people worldwidesuffer from various autoimmune disorders. Phadia's allergy segment makes up 85percent of its revenues, according to Thermo Fisher's presentation, and itsautoimmunity segment makes up the remaining 15 percent. 
 
 
"From a market perspective, Phadia has significant growthopportunities in the large, under-penetrated U.S. market, and can leverage ourstrong presence in emerging geographies to further accelerate growth," Caspernotes. "This transaction is another great example of our acquisition strategyto strengthen our position in growing markets, expand our customer offeringsand create value for our shareholders."
 
 
Thermo Fisher expects the acquisition to generate a total of$35 million in terms of cost and revenue synergies in 2014, with $10 million tobe generated in 2012, which includes $15 million from cost-related synergies aswell as $20 million of adjusted operating income benefit from revenue-relatedsynergies. Phadia's 2010 total sales were 367 million euros (about $525million). The company employs about 1,500 people globally, and Casper notesthat Thermo Fisher looks forward to "welcoming Phadia's talented employees tothe Thermo Fisher team."
 
 
"Together, we will offer our customers a wider range ofleading technologies to improve diagnostics, further supporting our mission ofenabling our customers to make the world healthier, cleaner and safer," Casperadds."
 
Thermo Fisher has Barclays Capital acting as financialadvisor and Wilmer Cutler Pickering Hale and Dorr LLP acting as legal counselfor the deal. Phadia has Goldman, Sachs & Co. acting as financial advisorand Freshfields Bruckhaus Deringer LLP acting as legal counsel.

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