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Thermo Fisher (TMO) to Acquire Life Tech (LIFE) for $76/Share

April 15, 2013 7:05 AM EDT Send to a Friend
(Updated - April 15, 2013 7:26 AM EDT)

Thermo Fisher Scientific (NYSE: TMO), the world leader in serving science, and Life Technologies Corporation (NASDAQ: LIFE), a leading life sciences company, have signed a definitive agreement under which Thermo Fisher will acquire Life Technologies for $76.00 in cash per fully diluted common share, or approximately $13.6 billion, plus the assumption of net debt at close ($2.2 billion as of year end 2012).

The transaction, which was approved by both companies’ boards of directors, will create an unrivaled leader in serving research, specialty diagnostics and applied markets. The combination builds on both companies’ technological strengths to accelerate results for life sciences customers working in proteomics, genomics and cell biology.

Benefits of the Transaction

The acquisition of Life Technologies will create enhanced scale and depth of capabilities for customers working in research, specialty diagnostics and applied markets.

* Strengthens technology and innovation leadership through complementary offerings that broaden Thermo Fisher’s industry-leading portfolio. Life has an extensive offering of consumables for genomics, and molecular and cell biology. It is well-known for its next-generation sequencing capability, and also has a range of technologies for bioproduction and forensics applications. These strengths, combined with Thermo Fisher’s leading offerings in analytical technologies and specialty diagnostics, create new opportunities to support the convergence of life sciences tools and diagnostics.
* Creates the ultimate customer partner, enhancing Thermo Fisher’s commercial strength and global reach. Life transacts more than half of its orders online through a highly regarded e-commerce platform. This leading capability, combined with Thermo Fisher’s extensive research and healthcare customer channels, creates a world-class commercial infrastructure. The combined company will also build on its strong foothold in Asia-Pacific, particularly in China, to meet increasing customer demand in life sciences and healthcare.
* Creates compelling value for shareholders, with attractive financial returns and new growth opportunities. The acquisition of Life presents the opportunity for $275 million of adjusted operating income synergies in year three following the close, consisting of $250 million of cost synergies and $25 million of revenue synergies. In addition, Thermo Fisher expects the transaction to be significantly and immediately accretive to adjusted EPS.

Financing and Approvals

Thermo Fisher will acquire Life for $76.00 in cash per fully diluted common share. The transaction, which is expected to close early in 2014, is subject to a Life shareholder vote and satisfying customary closing conditions, including regulatory approvals. Thermo Fisher has obtained committed bridge financing from J.P. Morgan and Barclays. Of the $13.6 billion of total cash consideration, the company expects the split to be cash and debt of $9.5 to $10.0 billion and equity of up to $4.0 billion. Thermo Fisher expects to maintain an investment-grade rating after the transaction has closed.

Advisors

J.P. Morgan and Barclays are acting as financial advisors to Thermo Fisher, and Wachtell, Lipton, Rosen & Katz and WilmerHale are serving as legal counsel. For Life, Deutsche Bank Securities Inc. and Moelis & Company are serving as financial advisors, and Cravath, Swaine and Moore LLP is serving as legal counsel.




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