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| Marc Casper, Thermo Fisher CEO |
Thermo Fisher Scientific ($TMO) has been busy on the M&A circuit, and now, it's adding another deal to its slate. The med tech giant is snatching up FEI for $4.2 billion to get its hands on the company's high-performance electron microscopy technology.
Both companies' boards of directors have unanimously approved the deal, which comprises $107.50 per share in cash. Waltham, MA-based Thermo Fisher will add FEI's high-performance electron microscopy to its portfolio. FEI's business, which had 2015 revenues of $930 million, will become a part of Thermo Fisher's Analytical Instruments Segment.
"The addition of FEI's leading electron microscopy platform is an outstanding strategic fit with our company and will create significant value for our customers and our shareholders," Thermo Fisher CEO Marc Casper said in a statement. "In life sciences, there is growing adoption of electron microscopy to study the structure of proteins. The technologies we gain with FEI will complement our mass spectrometry leadership, putting Thermo Fisher in the best position to capitalize on this important trend."
Thermo Fisher expects the deal to be accretive to earnings by $0.30 in the first full year after close. The company is also forecasting $55 million in cost synergies and $25 million of adjusted operating income benefit from revenue-related synergies from the acquisition, it said in a statement.
If all goes to plan, the companies will close the deal by early 2017, Thermo Fisher and Hillsboro, OR-based FEI said.
FEI is a "logical fit" for Thermo Fisher, given that electron microscopy "represented a gap" in the company's scientific instruments offering, Leerink analyst Dan Leonard wrote in a note to clients.
But the deal also increases Thermo Fisher's cyclicality, since FEI is "meaningfully exposed" to the semiconductor industry, Leonard points out. Still, that cyclicality "can likely be readily absorbed" in Thermo Fisher's approximately $18 billion annual turnover, he wrote.
A deal with FEI comes a couple months after Thermo Fisher defended its acquisition of Affymetrix ($AFFY). A shell company put up a last-minute takeover bid meant to derail the sale. But Thermo Fisher ultimately emerged victoriously and sealed its $1.3 billion deal for the gene editing firm.
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