Auriga Maintains a 'Buy' on Thermo Fisher Scientific (TMO); Close of Dionex Acquisition Likely to Occur In May; Closes Two Divestitures

Auriga maintains a 'Buy' on Thermo Fisher Scientific (NYSE: TMO), PT $66.

Auriga analyst says, "Yesterday, Thermo Fisher announced it was extending the tender offer for Dionex (Nasdaq: DNEX)(NotRated) to May 13, 2011, which coincides with the transaction receiving possible clearance from the European Commission (EC). These new timelines are slightly longer than we had been projecting (by about a month), but do not impact our long-term expectations. TMO also announced it completed the divestitures of Athena Diagnostics and Lancaster Labs, raising $940MM in proceeds. Despite all the moving parts related to corporate actions undertaken during 1Q11, we believe TMO's growth fundamentals remain solid. In view of TMO's broad product portfolio, growing exposure to emerging markets, potential competitive enhancements in its industry leading Mass Spectrometry portfolio (updates possible at ASMS in June), and steady underlying end-market demand, combined with an attractive valuation, we reiterate our rating."

"Assuming a Mid-May close, we estimate DNEX could potentially add $325MM in sales and $0.11-$0.12 to EPS in 2011. We expect TMO will update 2011 guidance after the DNEX transaction closes in May and will revisit our estimates at that time. TMO will be hosting an analyst meeting on May 25th."

For more ratings news on Thermo Fisher Scientific click here and for the rating history of Thermo Fisher Scientific click here.

Shares of Thermo Fisher Scientific closed at $55.85 yesterday.

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