Thermo Fisher nets FEI for $4.2B

The transaction values FEI at $107.50 per share in cash, and will complement Thermo Fisher's mass spectrometry offerings

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WALTHAM, Mass. & HILLSBORO, Ore.—Thermo Fisher Scientific Inc., along with FEI Company, has announced that it will be acquiring FEI for $107.50 per share, for a total purchase price of approximately $4.2 billion. The boards of directors of both companies have unanimously approved the transaction, and after it goes through, FEI will become part of Thermo Fisher's Analytical Instruments Segment. This transaction is expected to close by early 2017, subject to FEI shareholder approval and customary closing conditions, including applicable regulatory approvals.
“We are pleased to reach this agreement with Thermo Fisher, which offers a number of important benefits to FEI shareholders, customers and employees,” Don Kania, president and CEO of FEI, said in a press release. “Our shareholders will see substantial and immediate value through the terms of this transaction. Our customers will benefit from the shared commitment Thermo Fisher and FEI have to innovation and customer service. And our employees will see new opportunities as our development and market expansion plans accelerate by being part of Thermo Fisher, a large and growing company. Fundamentally, this transaction bolsters our already strong position in the marketplace and allows us to play an increasing role in enabling our customers to accelerate breakthrough discoveries, increase productivity and provide solutions to global challenges.”
FEI brings with it expertise in electron microscopy, boosting Thermo Fisher's own portfolio of mass spectrometry systems. FEI saw revenues of $930 million in 2015, and the company currently employs more than 3,000 people, with R&D, sales and manufacturing operations primarily in the United States and Europe. Thermo Fisher expects the deal to be accretive to its adjusted earnings per share by 30 cents in the first full year after close. In addition, the company expects to see total synergies of approximately $80 million by the third year following the deal's closing, comprised of $55 million in cost synergies and roughly $25 million in adjusted operating income benefit from revenue-related synergies.
“The addition of FEI’s leading electron microscopy platform is an outstanding strategic fit with our company and will create significant value for our customers and our shareholders,” Marc N. Casper, president and CEO of Thermo Fisher Scientific, commented regarding the deal. “In life sciences, there is growing adoption of electron microscopy to study the structure of proteins. The technologies we gain with FEI will complement our mass spectrometry leadership, putting Thermo Fisher in the best position to capitalize on this important trend. As the unrivaled leader in life sciences, we will also be able to leverage our global scale and commercial reach to extend the use of FEI’s products within our large biopharma customer base. Finally, the transaction will be immediately accretive to our earnings and will create value for our shareholders through cost and revenue synergies.”
“We are very excited to welcome our new colleagues from FEI to the Thermo Fisher team and look forward to realizing the significant benefits of the transaction for all our key stakeholders. FEI’s commitment to R&D, strong IP foundation, and excellent services and software offerings are a great fit with our Analytical Instruments business and will create exciting new opportunities to drive growth,” he added.
Thermo Fisher has engaged JP Morgan as its financial advisor for this transaction, with Wachtell, Lipton, Rosen & Katz serving as legal counsel. For its part, FEI has brought on Goldman, Sachs & Co. for financial advisor and Wilson Sonsini Goodrich & Rosati as its legal counsel.
SOURCE: Thermo Fisher press release

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