Thermo Fisher Scientific, a healthcare equipment company, has signed a definitive agreement to acquire Life Technologies, a global biotechnology tools company, for $76.00 in cash per fully diluted common share, or approximately $13.6 billion, plus the assumption of net debt at close ($2.2 billion as of year end 2012).
The transaction, which is expected to close early in 2014, is subject to a Life Technologies shareholder vote and satisfying customary closing conditions, including regulatory approvals. The transaction, which was approved by both companies' boards of directors, will create an unrivaled leader in serving research, specialty diagnostics and applied markets. The combination builds on both companies' technological strengths to accelerate results for life sciences customers working in proteomics, genomics and cell biology.
"We are extremely excited about this transaction because it creates the ultimate partner for our customers and significant value for our shareholders. The acquisition of Life Technologies enhances all three elements of our growth strategy: technological innovation, a unique customer value proposition and expansion in emerging markets,” said Marc N. Casper, president and CEO of Thermo Fisher Scientific. "Our customers in research and applied markets will now be able to achieve even higher levels of innovation and productivity by working with the combined company. We're especially excited about the new opportunities we will have to leverage our complementary offerings, fueled by a shared commitment to continuous innovation. For our shareholders, we expect the transaction to generate attractive financial returns, as well as significant and immediate accretion to our adjusted EPS."
The acquisition of Life Technologies will create enhanced scale and depth of capabilities for customers working in research, specialty diagnostics and applied markets. It will strengthen technology and innovation leadership through complementary offerings that broaden Thermo Fisher's industry-leading portfolio. Life Technologies has an extensive offering of consumables for genomics, and molecular and cell biology. It is well-known for its next-generation sequencing capability, and also has a range of technologies for bioproduction and forensics applications. These strengths, combined with Thermo Fisher's leading offerings in analytical technologies and specialty diagnostics, create new opportunities to support the convergence of life sciences tools and diagnostics.
The acquisition also creates the ultimate customer partner, enhancing Thermo Fisher's commercial strength and global reach. Life Technologies transacts more than half of its orders online through a highly regarded e-commerce platform. This leading capability, combined with Thermo Fisher's extensive research and healthcare customer channels, creates a world-class commercial infrastructure. The combined company will also build on its strong foothold in Asia-Pacific, particularly in China, to meet increasingg customer demand in life sciences and healthcare.
Furthermore, the acquisition creates compelling value for shareholders, with attractive financial returns and new growth opportunities. The acquisition of Life Technologies presents the opportunity for $275 million of adjusted operating income synergies in year three following the close, consisting of $250 million of cost synergies and $25 million of revenue synergies. In addition, Thermo Fisher expects the transaction to be significantly and immediately accretive to adjusted EPS.
Life Technologies provides innovative products and services to customers conducting scientific research and genetic analysis, as well as those in applied markets, such as forensics and food safety testing. With 2012 revenues of $3.8 billion, its comprehensive offering includes a broad range of reagents, consumables, instruments and systems. Life Technologies' leading technologies are protected by approximately 5,000 patents and licenses, and it builds on this position through a strong commitment to innovation. Life Technologies has an expansive commercial presence and global footprint as well, with more than 10,000 employees serving its customers around the world.
It is expected that Life Technologies' president and chief operating officer, Mark P. Stevenson, will have a significant leadership role in the combined company. In addition, Thermo Fisher intends to elect a member of the Life Technologies board of directors to the Thermo Fisher board.