Thermo Fisher ties up $2.6B deal for cancer diagnostics maker The Binding Site

Fresh off reporting higher-than-expected third-quarter revenues that it attributed to a strong diagnostics division and the lasting effects of recent acquisitions, Thermo Fisher Scientific is doubling down in both areas.

Its newest acquisition will see U.K.-based The Binding Site join Thermo Fisher’s specialty diagnostics division in an all-cash deal totaling 2.25 billion pounds sterling, or about $2.6 billion, the companies announced Monday.

The Binding Site was founded nearly 40 years ago, during which time it has developed a range of tests and instruments focused on detecting and monitoring various cancers and immune system disorders. Its flagship Freelite diagnostic, for example, is a blood test used to help spot and track multiple myeloma and other related blood cancers.

The test-maker is being sold by a shareholder group that includes Nordic Capital, its majority owner, and Five Arrows Capital Partners. The private equity companies originally acquired The Binding Site in 2011 for an undisclosed amount.

If all goes according to plan, the acquisition will be completed sometime in the first half of next year. After that, the new addition is expected to add about seven cents to Thermo Fisher’s adjusted earnings per share for the first full year following the deal’s close, the company said.

The Binding Site is slated to rake in more than $220 million for 2022, keeping up with a 10% annual growth rate, according to Monday’s announcement. Its future home, Thermo Fisher’s specialty diagnostics business, tallied nearly $5.7 billion in revenues for 2021, though that number may slip this year: For the first nine months of 2022, the segment reported $3.6 billion in revenues, down about 13% from the same point last year.

“The Binding Site is extremely well-respected by researchers and clinicians alike for its pioneering diagnosis and monitoring solutions for multiple myeloma,” said Marc Casper, Thermo Fisher’s president and CEO. “We also know early diagnosis and well-informed treatment decisions for multiple myeloma can make a significant difference in patient outcomes.”

He continued, “We are excited by the opportunity to enable further innovation in this area for the benefit of patients and look forward to welcoming The Binding Site team to Thermo Fisher.”

This marks the first acquisition for Thermo Fisher in 2022. In the first week of the year—fresh off the close of its blockbuster $17.4 billion purchase of contract research giant PPD—the company revealed that in the final days of 2021, it had offered up $1.85 billion for cell and gene protein producer PeproTech.

In its third-quarter earnings report last week, the diagnostics giant boasted 14% year-over-year growth and linked a solid 20% of the revenue boost to recent acquisitions.