Thermo Fisher to buy Affymetrix for $1.3B to beef up in genetic analysis

Laboratory equipment company Thermo Fisher Scientific ($TMO) is buying Santa Clara, CA's Affymetrix ($AFFY) for $1.3 billion in a bid to strengthen its position in the drug research and genetic analysis arenas.

Specifically, Affymetrix genetic analysis products are used in cytogenetics, genotyping and gene expression, according to a Thermo Fisher release.

The deal also adds cellular analysis capabilities to Thermo Fisher's portfolio. Affymetrix's offerings include diagnostics, antibodies, multiplex RNA, and protein and single-cell assays.

Marc Casper, Thermo Fisher CEO

"In biosciences, the company's antibody portfolio will significantly expand our offering in the fast-growing flow cytometry market, and customers will have greater access to these products through our global scale and commercial reach. In genetic analysis, Affymetrix's technologies are highly complementary and present new opportunities for us in targeted clinical and applied markets," Thermo Fisher CEO Marc Casper said in a statement.

Affymetrix will become part of Thermo Fisher's Life Science Solutions division upon closure, expected in Q2 2016. Thermo Fisher said in the release that it expects synergies of $70 million over three years, consisting of $55 million in cost synergies and $15 million in revenue-related synergies.

Affymetrix employs 1,100 people and has annual revenues of $350 million. The former high-flyer saw its stock peak at $160 during the 2000 tech bubble. It's stock now trades around $14, though that's up from $9 before weekend news of the impending transaction.

Thermo Fisher stock was unchanged in after-hours trading. It trades for $134. The company employs 50,000 people and has annual revenues around $17 billion. It last year lost out to rival Danaher ($DHR) in the bidding war for water filtration and purification system maker Pall.

Both companies aim to serve the R&D interests of biopharma players. Thermo Fisher launched the Ion S5 next-generation sequencing system last year to assist in clinical trials in which a quick, affordable snapshot of a panel of genes is needed.

- read the release