|Life Technologies CEO Greg Lucier|
Life Technologies ($LIFE) is getting a close look from a bevy of private equity giants, but analysts warn that the company isn't growing fast enough to convince would-be buyers to pony up the rumored $15.7 billion asking price.
As Bloomberg reports, that figure values the company at about $75 per share, but Life's 5% average annual sales increase over the last three years is unlikely to have the likes of Blackstone and TPG tendering top dollar, analysts say, and an offer of $65 a share is more likely.
That would value Life at around $13.6 billion, and while the sum might be disappointing to shareholders dreaming of a big-money exit, Bloomberg notes that it's still above what they'd get if Life remained a standalone company.
At the same time, while the private equity firms are constrained in their bidding by internal rate of return requirements, that doesn't apply to Life's competitors, and Bloomberg's sources say Thermo Fisher ($TMO) and Danaher ($DHR) are considering making bids for the sequencing heavyweight.
Those offers could tick up to $15 billion, but the news service reports that Life CEO Greg Lucier would prefer the company get bought through a leveraged equity deal rather than be folded into another outfit, that way it can keep charting its own path and he can stay in charge.
The rumors of Life's big exit have seesawed back and forth since January, when the company hired two major banks to "assist in its annual strategic review." Initial bids valued the company at around $12 billion, but it's stock has soared 14% since then, leading to reports that it had become too pricey for its suitors and that deal talks had flatlined.
For its part, Life predicts it will grow another 3% to 5% in 2013, good for between $3.9 billion and $4 billion in revenue.
- read Bloomberg's story