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Thermo Fisher Targeting Pay Down on Debt, Bolt-on Acquisitions, CEO Says

Thermo Fisher Scientific Inc. (TMO), the largest maker of laboratory instruments, will use cash this year to pay down its $7 billion in debt and will continue to seek bolt-on acquisitions, Chief Executive Officer Marc Casper said.

While the Waltham, Massachusetts-based company still has an appetite for deals, Casper said in an interview that he doesn’t see a larger transaction happening “any time soon.”

Thermo Fisher made five acquisitions in 2011, including its $3.5 billion acquisition of Phadia AB and $2.1 billion purchase of Dionex Corp.

“Our cash will remain relatively stable, but we’ll reduce debt a little bit,” Casper said. “That’s the starting assumption.”

Thermo Fisher has $900 million of commercial paper outstanding, and a 2.15 percent $350 million senior note coming due Dec. 28, 2012. The instrument-maker has a share repurchase program pace of about $750 million a year, about half of its cash flow, Casper said.

Laboratory budgets are going to be increasing as new construction is spurred by an increased focus on quality assurance, he predicted. Thermo Fisher also is benefiting from some of its specialty diagnostics products, such as greater sales of allergy tests, he said.

While the economy is struggling, Casper said research funding and academic funding is relatively well protected in Europe. In the U.S., spending by research institutions in the fourth quarter was better than the third quarter, he said.

“What we saw in second half will continue through the course of 2012,” Casper said.

Thermo Fisher gained less than 1 percent to $55.86 at the close in New York. The company’s shares declined 1.3 percent in the past 12 months.

To contact the reporter on this story: Sasha Damouni in New York at sdamouni2@bloomberg.net

To contact the editors responsible for this story: Reg Gale at rgale5@bloomberg.net; Brad Skillman at bskillman1@bloomberg.net

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