Thermo Fisher ($TMO) reached a major milestone in its $13.6 billion bid to buy Life Technologies ($LIFE), announcing that it will sell its gene modulation, cell culture and magnetic beads segments to GE Healthcare ($GE) for $1.1 billion. Thermo inked the deal after the European Commission said in November it would only approve the Life Tech merger if Thermo sold off some businesses.
The three units, which will become part of GE Healthcare's Life Sciences division, brought in about $250 million in revenue last year, said Waltham, MA-based Thermo in a statement. GE added that the acquisition will allow it to expand its technology offerings in life sciences, which currently bring in about $4 billion a year in sales.
In particular, GE expects Thermo's HyClone cell culture and sera products, which are used in the manufacturing of biotech drugs and vaccines, to complement its own cell biology and manufacturing line, enabling the company to offer "a substantially wider range of technologies and services," GE said in a statement. GE also pointed to Thermo's Sera-Mag magnetic beads product as an innovative extension of its own protein analysis and diagnostics technologies.
"This deal makes a good business even better and will help us realize our vision of bringing better healthcare to more people at lower cost," said John Dineen, CEO of GE's England-based Healthcare unit, in the statement.
GE expects the acquisition to close in the early part of 2014. Thermo, meanwhile, is counting on this deal to expedite EU approval of its Life Tech merger. The company said it doesn't expect to need further divestitures to get the Federal Trade Commission to sign off on the union, and that it is "working with the remaining jurisdictions to obtain the approvals required to complete the acquisition as soon as possible."
Thermo has been slimming down in preparation for the Life Tech deal, cutting 655 jobs last year. The company predicts the merger will save it $275 million in annual costs by year three. CEO Marc Casper has said he expects the Life Tech combination will lead to 30% annual revenue growth.
That said, Thermo has done pretty well on its own, increasing its net revenue 3% to a record $3.2 billion in the third quarter, which drove net profits up 9% year over year to $317.6 million. The company expects to record total revenues of about $13 billion for 2013, a 4% bump over the previous year's take.
- read Thermo's release
- here's GE's statement