|Thermo Fisher CEO Marc Casper|
Thermo Fisher ($TMO) has lightened its payroll since agreeing to buy Life Technologies ($LIFE) for $13.6 billion, slashing 240 jobs in the second quarter and running up a multimillion-dollar bill in the process.
As detailed in a regulatory filing, Thermo cut 80 positions in analytical technologies, 110 in specialty diagnostics and 150 in lab products and services. All those cuts made for about $12.8 million in severance costs for the Massachusetts giant, more than half of the $21.5 million in restructuring charges Thermo disclosed in its second-quarter earnings statement last month.
Thermo is working through what it terms "headcount reductions and facility consolidations" as it works toward the full integration of Life Technologies, expecting its deal to close early next year. The Life acquisition will spur roughly 30% annual revenue growth and save about $275 million by year three, the company has said, and many of those long-term cost synergies will likely mean short-term job cuts.
The full price tag is $13.6 billion plus another $2.2 billion to retire Life's outstanding debt, and, upon the deal's announcement in April, many analysts questioned whether Thermo overpaid for a company that has averaged sales growth of only about 5% over three years. Life lags behind Illumina ($ILMN) in the gene sequencing world, and while the company's Ion Torrent platform has had success, many market watchers wonder whether Life is fated for second place.
Unsurprisingly, Thermo CEO Marc Casper is among the more optimistic, saying the acquisition "will take our leadership position to a new level, creating an unrivaled leader in our industry."
As it stands, Thermo is still putting together the financing for its high-dollar acquisition, raising $2.2 billion in a stock sale and planning to use $10 billion of cash and debt and another $4 billion in equity to finish the process.
- read Thermo's SEC filing