Big news: Thermo Fisher Buying Life Technologies for $13.6B# Biology - 生物学
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http://www.genomeweb.com//node/1217241?hq_e=el&hq_m=1567445&hq_
NEW YORK (GenomeWeb News) – Thermo Fisher Scientific is acquiring Life
Technologies in a $13.6 billion deal, the firms jointly announced today.
Thermo Fisher was rumored over the past couple of weeks to be in advanced
talks to acquire Life Tech, while private equity firms also had been
reported as working on bids to get a deal done. The transaction signing
comes three months after Life Tech confirmed it had hired Deutsche Bank and
Moelis to "assist in its annual strategic review," following a report from a
Canadian news organization that Life Tech was seeking a buyer.
Thermo Fisher will pay $76 per share to acquire Life Tech and assume $2.2
billion of net debt. Life Tech had $3.8 billion in 2012 revenues and has a
market cap of around $11.6 billion. Thermo Fisher had 2012 revenues of $12.
51 billion.
Thermo Fisher said that it has obtained committed bridge financing from JP
Morgan and Barclays. It expects to pay for the deal through a combination of
$9.5 billion to $10 billion in cash and debt and up to $4 billion in equity.
"The acquisition of Life Technologies enhances all three elements of our
growth strategy: technological innovation, a unique customer value
proposition, and expansion in emerging markets," Thermo Fisher President and
CEO Marc Casper said in a statement. "Our customers in research and applied
markets will now be able to achieve even higher levels of innovation and
productivity by working with the combined company."
The firms expect to close the deal in early 2014. The transaction is subject
to approval from Life Tech's shareholders and customary closing conditions.
On a conference call this morning, Life Tech Chairman and CEO Greg Lucier
said the deal represents the "successful conclusion to our board's strategic
review to enhance stockholder value and develop an even stronger future for
our company."
The firms said that they expect $275 million of adjusted operating income
synergies in the third year following close of the deal, consisting of $250
million in cost synergies and $25 million in revenue synergies. Thermo
Fisher also said that it expects the deal to be "significantly and
immediately accretive" to its adjusted EPS.
Thermo Fisher CFO Peter Wilver added on the call that the deal is expected
to add $.90 to $1.00 to adjusted EPS in the first full year after the close
of the acquisition. He also said that the company is committed to paying out
a dividend to shareholders and will increase the amount over time.
With the deal, Thermo Fisher becomes a major player in the next-generation
sequencing space, an area in which the company has historically taken a back
seat. Casper said that Life Tech is the number two player in the space, but
"it has been gaining share recently and has a very exciting technology
pipeline."
While Thermo Fisher is modeling overall organic growth of 3 percent for Life
Tech, Casper said that Life Tech's Ion Torrent business is anticipated to
grow at a "much faster rate," and profitability within that business will
improve over time.
"It's an aggressive growth rate, so there [are] significant investments to
fuel that growth, but we expect there'll be a nice return over time," Casper
said.
He said that for the moment there is no thought to divesting any of Life
Tech's businesses and the focus is on growing the entire portfolio. Dan
Leonard of Leerink Swann said in a note this morning, however, that "smaller
pieces of the combined [Life/Thermo Fisher] portfolio might need to find
new homes to enable this combination, which creates an opportunity for peers
."
Areas of overlap include Thermo Fisher's Finnzymes and HyClone businesses.
He added there is overlap in the protein biology businesses, "but that is a
more fragmented market.
The company did not say what role, if any, Lucier will have with the
combined company, though Mark Stevenson, president and COO of Life Tech,
will have a "significant role" in the combined firm. Lucier added that there
are programs in place to retain Life Tech talent after the close of the
deal but did not provide additional details.
In addition, one Life Tech board member will be invited to join Thermo
Fisher's board, but that individual has not yet been identified.
Based in Waltham, Mass., Thermo Fisher has about 39,000 employees, while
Carlsbad, Calif.-based Life Tech has more than 10,000 employees.
Thermo Fisher was born out of a $10.6 billion merger between Thermo Electron
and Fisher Scientific in 2006. Life Tech resulted from a $6.7 billion
merger in 2008 that brought together Invitrogen's portfolio of reagents and
low-cost instruments for molecular and cell biology research as well as
protein research, and Applied Biosystems' consumables and instruments
targeting DNA sequencing, proteomics, RNAi, gene expression, and applied
testing.
That deal followed a decision by ABI's parent firm Applera to split ABI and
its sister company Celera, which had been trading as tracking stocks of
Applera. Originally, the merged ABI/Invitrogen company planned to keep the
ABI name but eventually adopted Life Technologies as its moniker.
At the time of the merger, ABI had a mass spectrometry joint venture with
MDS Sciex, and together they were generally regarded as the market leader in
the mass spec space, though Thermo Fisher was closing the gap. Life Tech
officials maintained that it would keep the mass spec business, even as that
business was in the midst of a sharp downturn, as GenomeWeb Daily News
sister publication ProteoMonitor reported at the time.
Mass specs, however, never fit with Life Tech's business model, which was
based on the sales of reagents and consumables with newly acquired
instruments offered by the firm, and in 2009, it and MDS Sciex sold the mass
spec business to Danaher as part of a larger $1.1 billion deal.
Since then, it has staked its future on next-generation sequencing
technology, although it also sells instruments for DNA analysis, such as CE
sequencers and PCR platforms, and in total sells more than an estimated 50,
000 products.
In recent years, Life Tech has waged a battle with Illumina for control over
the benchtop sequencing space, and that competitive skirmish has now
extended to the desktop sequencing market.
Crucial to Life Technologies' entry and growth in the desktop space has been
its 2010 acquisition of Ion Torrent for up $725 million. Founded by
Jonathan Rothberg, who had previously founded RainDance Technologies and 454
Life Sciences, a sequencing firm that Roche bought in 2007, Ion Torrent
developed a platform called the Personal Genome Machine, which used
polymerase-based sequencing-by-synthesis chemistry, but without a need for
lasers, cameras, or labels. Instead the technology reads DNA on a
semiconductor chip by measuring the release of hydrogen ions as nucleotides
are incorporated by DNA polymerase.
Last year, Life Tech launched the Ion Proton platform, which also uses the
same semiconductor-based technology as PGM.
In addition to sequencing, Life Tech has moved in the diagnostics arena and
in the past year has acquired Compendia, Pinpoint Genomics, and Navigenics,
as well as forged deals with CollabRx and Ingenuity Systems as part of that
effort.
With its market cap of $11.6 billion, Life Tech ranks among the largest life
science tools companies in the world. Yet, there was also a sense that its
stock has underperformed.
In September investment bank William Blair initiated coverage of the company
, and in a research note analyst Amanda Murphy said, "Valuation is arguably
inexpensive for a company that generates stable earnings growth and robust
cash flow."
In a report issued in January, after it became publicly known that Life Tech
was engaged in seeking a buyer, Jon Groberg, an analyst at Macquarie
Research, wrote that the firm is "well-positioned to benefit from the
increasing demand for molecular, genetic, and cellular information and
understanding, providing, in our view, a remarkably stable and
underappreciated revenue base."
He added that "investor sentiment is too low on [Life Tech's] franchise and
highlight that in a recession [it] is one of the few stocks where 2012
estimates look reasonable and are potentially conservative. … [Life Tech's]
absolute and relative earnings multiples have plenty of room to expand as
the stock currently trades at a discount to both its historical absolute and
relative averages."
William Quirk, an analyst at Piper Jaffray said that he does not anticipate
additional bidders to emerge as the deal awaits regulatory approval to be
completed. He said, though, that potential disruptions, such as employee
turnover at Life Tech, could represent an opportunity for competitors
including Illumina to gain share.
In Monday morning trade on the Nasdaq, shares of Life Tech jumped nearly 8
percent to $73.16, while shares of Thermo Fisher climbed 2 percent to $81.40
on the New York Stock Exchange.
NEW YORK (GenomeWeb News) – Thermo Fisher Scientific is acquiring Life
Technologies in a $13.6 billion deal, the firms jointly announced today.
Thermo Fisher was rumored over the past couple of weeks to be in advanced
talks to acquire Life Tech, while private equity firms also had been
reported as working on bids to get a deal done. The transaction signing
comes three months after Life Tech confirmed it had hired Deutsche Bank and
Moelis to "assist in its annual strategic review," following a report from a
Canadian news organization that Life Tech was seeking a buyer.
Thermo Fisher will pay $76 per share to acquire Life Tech and assume $2.2
billion of net debt. Life Tech had $3.8 billion in 2012 revenues and has a
market cap of around $11.6 billion. Thermo Fisher had 2012 revenues of $12.
51 billion.
Thermo Fisher said that it has obtained committed bridge financing from JP
Morgan and Barclays. It expects to pay for the deal through a combination of
$9.5 billion to $10 billion in cash and debt and up to $4 billion in equity.
"The acquisition of Life Technologies enhances all three elements of our
growth strategy: technological innovation, a unique customer value
proposition, and expansion in emerging markets," Thermo Fisher President and
CEO Marc Casper said in a statement. "Our customers in research and applied
markets will now be able to achieve even higher levels of innovation and
productivity by working with the combined company."
The firms expect to close the deal in early 2014. The transaction is subject
to approval from Life Tech's shareholders and customary closing conditions.
On a conference call this morning, Life Tech Chairman and CEO Greg Lucier
said the deal represents the "successful conclusion to our board's strategic
review to enhance stockholder value and develop an even stronger future for
our company."
The firms said that they expect $275 million of adjusted operating income
synergies in the third year following close of the deal, consisting of $250
million in cost synergies and $25 million in revenue synergies. Thermo
Fisher also said that it expects the deal to be "significantly and
immediately accretive" to its adjusted EPS.
Thermo Fisher CFO Peter Wilver added on the call that the deal is expected
to add $.90 to $1.00 to adjusted EPS in the first full year after the close
of the acquisition. He also said that the company is committed to paying out
a dividend to shareholders and will increase the amount over time.
With the deal, Thermo Fisher becomes a major player in the next-generation
sequencing space, an area in which the company has historically taken a back
seat. Casper said that Life Tech is the number two player in the space, but
"it has been gaining share recently and has a very exciting technology
pipeline."
While Thermo Fisher is modeling overall organic growth of 3 percent for Life
Tech, Casper said that Life Tech's Ion Torrent business is anticipated to
grow at a "much faster rate," and profitability within that business will
improve over time.
"It's an aggressive growth rate, so there [are] significant investments to
fuel that growth, but we expect there'll be a nice return over time," Casper
said.
He said that for the moment there is no thought to divesting any of Life
Tech's businesses and the focus is on growing the entire portfolio. Dan
Leonard of Leerink Swann said in a note this morning, however, that "smaller
pieces of the combined [Life/Thermo Fisher] portfolio might need to find
new homes to enable this combination, which creates an opportunity for peers
."
Areas of overlap include Thermo Fisher's Finnzymes and HyClone businesses.
He added there is overlap in the protein biology businesses, "but that is a
more fragmented market.
The company did not say what role, if any, Lucier will have with the
combined company, though Mark Stevenson, president and COO of Life Tech,
will have a "significant role" in the combined firm. Lucier added that there
are programs in place to retain Life Tech talent after the close of the
deal but did not provide additional details.
In addition, one Life Tech board member will be invited to join Thermo
Fisher's board, but that individual has not yet been identified.
Based in Waltham, Mass., Thermo Fisher has about 39,000 employees, while
Carlsbad, Calif.-based Life Tech has more than 10,000 employees.
Thermo Fisher was born out of a $10.6 billion merger between Thermo Electron
and Fisher Scientific in 2006. Life Tech resulted from a $6.7 billion
merger in 2008 that brought together Invitrogen's portfolio of reagents and
low-cost instruments for molecular and cell biology research as well as
protein research, and Applied Biosystems' consumables and instruments
targeting DNA sequencing, proteomics, RNAi, gene expression, and applied
testing.
That deal followed a decision by ABI's parent firm Applera to split ABI and
its sister company Celera, which had been trading as tracking stocks of
Applera. Originally, the merged ABI/Invitrogen company planned to keep the
ABI name but eventually adopted Life Technologies as its moniker.
At the time of the merger, ABI had a mass spectrometry joint venture with
MDS Sciex, and together they were generally regarded as the market leader in
the mass spec space, though Thermo Fisher was closing the gap. Life Tech
officials maintained that it would keep the mass spec business, even as that
business was in the midst of a sharp downturn, as GenomeWeb Daily News
sister publication ProteoMonitor reported at the time.
Mass specs, however, never fit with Life Tech's business model, which was
based on the sales of reagents and consumables with newly acquired
instruments offered by the firm, and in 2009, it and MDS Sciex sold the mass
spec business to Danaher as part of a larger $1.1 billion deal.
Since then, it has staked its future on next-generation sequencing
technology, although it also sells instruments for DNA analysis, such as CE
sequencers and PCR platforms, and in total sells more than an estimated 50,
000 products.
In recent years, Life Tech has waged a battle with Illumina for control over
the benchtop sequencing space, and that competitive skirmish has now
extended to the desktop sequencing market.
Crucial to Life Technologies' entry and growth in the desktop space has been
its 2010 acquisition of Ion Torrent for up $725 million. Founded by
Jonathan Rothberg, who had previously founded RainDance Technologies and 454
Life Sciences, a sequencing firm that Roche bought in 2007, Ion Torrent
developed a platform called the Personal Genome Machine, which used
polymerase-based sequencing-by-synthesis chemistry, but without a need for
lasers, cameras, or labels. Instead the technology reads DNA on a
semiconductor chip by measuring the release of hydrogen ions as nucleotides
are incorporated by DNA polymerase.
Last year, Life Tech launched the Ion Proton platform, which also uses the
same semiconductor-based technology as PGM.
In addition to sequencing, Life Tech has moved in the diagnostics arena and
in the past year has acquired Compendia, Pinpoint Genomics, and Navigenics,
as well as forged deals with CollabRx and Ingenuity Systems as part of that
effort.
With its market cap of $11.6 billion, Life Tech ranks among the largest life
science tools companies in the world. Yet, there was also a sense that its
stock has underperformed.
In September investment bank William Blair initiated coverage of the company
, and in a research note analyst Amanda Murphy said, "Valuation is arguably
inexpensive for a company that generates stable earnings growth and robust
cash flow."
In a report issued in January, after it became publicly known that Life Tech
was engaged in seeking a buyer, Jon Groberg, an analyst at Macquarie
Research, wrote that the firm is "well-positioned to benefit from the
increasing demand for molecular, genetic, and cellular information and
understanding, providing, in our view, a remarkably stable and
underappreciated revenue base."
He added that "investor sentiment is too low on [Life Tech's] franchise and
highlight that in a recession [it] is one of the few stocks where 2012
estimates look reasonable and are potentially conservative. … [Life Tech's]
absolute and relative earnings multiples have plenty of room to expand as
the stock currently trades at a discount to both its historical absolute and
relative averages."
William Quirk, an analyst at Piper Jaffray said that he does not anticipate
additional bidders to emerge as the deal awaits regulatory approval to be
completed. He said, though, that potential disruptions, such as employee
turnover at Life Tech, could represent an opportunity for competitors
including Illumina to gain share.
In Monday morning trade on the Nasdaq, shares of Life Tech jumped nearly 8
percent to $73.16, while shares of Thermo Fisher climbed 2 percent to $81.40
on the New York Stock Exchange.
