Thermo Fisher Scientific Inc. will buy FEI Co. for about $4.2 billion, the latest deal by the diagnostics and research equipment company in a campaign of acquisition to beef up its suite of testing and technology services.
Thermo Fisher will pay $107.50 a share in cash and the deal is expected to close early next year, the companies said in a statement Friday. FEI rose 14 percent to $107.48 at 9:49 a.m. in New York, suggesting that investors believe the purchase will go through.
“We view this acquisition as a nice tuck-in,” Ross Muken, an analyst at Evercore ISI, said in a research note. “FEI is a unique high end instrumentation asset with leverage to the highly attractive applied markets.”
Thermo Fisher has been acquiring genetic testing, diagnostics and research assets through a series of deals. In April, it bought Affymetrix Inc. for about $1.1 billion, adding technology used by scientists and biologists to analyze specimens at the cellular and genetic level. And in 2014, it paid $15 billion for Life Technologies Corp., a DNA-sequencing company.
FEI produces electron microscopes which are used to analyze proteins, giving Waltham, Massachusetts-based Thermo Fisher a complementary product line to its mass spectrometry systems. Based in Hillsboro, Oregon, FEI has more than 3,000 employees worldwide and has operations mainly in Europe and the U.S. FEI, which had 2015 revenues of $930 million, will become part of Thermo Fisher’s Analytical Instruments Segment.
Both boards unanimously approved the deal. The agreed price represents a 14 percent premium to FEI’s closing share price of $94.58 on Thursday.
The transaction will immediately add about 30 cents to Thermo Fisher’s adjusted earnings in the first full year after the deal closes, the company said, and will also produce cost savings about $80 million within three years.
JPMorgan Chase & Co. was Thermo Fisher’s financial adviser, and Wachtell, Lipton, Rosen & Katz its legal adviser. Goldman Sachs Group Inc. was FEI’s financial adviser, and Wilson Sonsini Goodrich & Rosati PC provided legal advice.
(Updates with analyst’s comment in fourth paragraph.)
Link to Statement:Link