WALTHAM, Mass. and CARLSBAD, Calif.—Toutingphrases like "unrivaled industry leader" and "innovation leadership," ThermoFisher Scientific and Life Technologies Corp. announced April 15 that they havesigned a definitive agreement for Thermo Fisher to acquire Life Technologiesfor $76.00 in cash per fully diluted common share, or approximately $13.6billion, plus the assumption of net debt at close ($2.2 billion as of year end2012).
The transaction has been approved by bothcompanies' boards of directors, and will create, they say, "an unrivaled leaderin serving research, specialty diagnostics and applied markets," noting that thecombination builds on both companies' technological strengths to accelerateresults for life sciences customers working in proteomics, genomics and cellbiology.
"[This transaction] creates the ultimate partnerfor our customers and significant value for our shareholders," said Marc N.Casper, president and CEO of Thermo Fisher Scientific. "The acquisition of LifeTechnologies enhances all three elements of our growth strategy: technologicalinnovation, a unique customer value proposition and expansion in emergingmarkets."
He maintains that post-merger, customers inresearch and applied markets will be able to achieve even higher levels ofinnovation and productivity by working with the combined company.
"We're especially excited about the newopportunities we will have to leverage our complementary offerings, fueled by ashared commitment to continuous innovation," Casper said. "For ourshareholders, we expect the transaction to generate attractive financialreturns, as well as significant and immediate accretion to our adjusted EPS."
Life provides products and services for clientsconducting scientific research and genetic analysis, as well as those inapplied markets, such as forensics and food safety testing. With 2012 revenuesof $3.8 billion, its comprehensive offerings includes a broad range of reagents,consumables, instruments and systems. Life's leading technologies are protectedby approximately 5,000 patents and licenses, and the company boasts an "expansivecommercial presence and global footprint," with more than 10,000 employeesserving its customers around the world.
"This transaction brings together two companiesintent on accelerating innovation for our customers and achieving greatersuccess in a highly competitive global industry," said Gregory T. Lucier,chairman and CEO of Life Technologies. "Further, this combination deliversimmediate and significant cash value to our stockholders and represents asuccessful conclusion to the board's strategic review to enhance stockholdervalue and develop an even stronger future for Life Technologies. We lookforward to joining forces with the outstanding team at Thermo Fisher, whichshares our commitment to customers, employees and the communities we serve."
The two companies anticipate that LifeTechnologies' president and chief operating officer, Mark P. Stevenson, will havea significant leadership role in the combined company. In addition, ThermoFisher intends to elect a member of the Life Technologies board of directors toits board.
Life Technologies' extensive offering ofconsumables for genomics and molecular and cell biology and its well-known next-generationsequencing capabilities, among other strengths, are expected to combined well withThermo Fisher's leading offerings in analytical technologies and specialtydiagnostics, to "create newopportunities to support the convergence of life sciences tools anddiagnostics."
The companies also anticipate that Life's transactionmodel, in which more than half of its orders are made online through ane-commerce platform, will combine with Thermo Fisher's extensive research andhealthcare customer channels to create a world-class commercial infrastructure.
Furthmore, the combined company would also buildon a strong foothold in Asia-Pacific, particularly in China, to meet increasingcustomer demand in life sciences and healthcare.
The acquisition of Life presents the opportunityfor $275 million of adjusted operating income synergies in year three followingthe close, the companies say, consisting of $250 million of cost synergies and$25 million of revenue synergies. In addition, Thermo Fisher expects thetransaction to be significantly and immediately accretive to adjusted EPS.
SOURCE: Thermo Fisher/Life Technologies news release