Thermo Fisher to acquire Life Technologies in $13.8B deal

Thermo Fisher to acquire Life Technologies in $13.8B deal

CARLSBAD — Biotechnology company Life Technologies Corporation will be sold to science equipment company Thermo Fisher Scientific Incorporated for $13.8 billion, according to announcements made by the companies April 15. 

The $76-per-share all-cash deal also takes on $2.2 billion in Life Technologies’ debt, bringing the purchase amount closer to approximately $16 billion.

“This transaction brings together two companies intent on accelerating innovation for our customers and achieving greater success in a highly competitive global industry,” said Life Technologies chairman and CEO Greg Lucier in a press release.

Life Technologies specializes in creating lab equipment for genomics as well as molecular and cell biology, owns about 5,000 patents and licenses, and earned $3.8 billion in revenues last year. Its main brands include Invitrogen and Ion Torrent.

Approximately 1,200 of Life Technologies’ 10,000 employees are based in Carlsbad, according to the company’s Director of Corporate Communications and Public Relations Suzanne Hatcher.

According to statements made during the investor analysts’ conference call with executives from each company on April 15, Thermo Fisher intends on retaining most of Life Technologies’ current employees.

“We’re going to have a series of programs in place to retain employees between the signing and the close (of this deal),” said Lucier during the call.

Life Technologies’ president and COO Mark Stevenson, as well as one member of the board of directors, will be joining Thermo Fisher’s leadership, according to the announcement of the acquisition.

While the companies’ investor analysts are legally bound not to comment on the deal, transcripts from the conference call highlighted some of their general concerns.

When asked by an ISIS Group analyst about the financial long-term growth rates of each company, Thermo Fisher President and CEO Marc Casper said that executives expect a 3 percent organic growth rate from Life Technologies, despite recent slackening in the company’s growth, and a 4 to 6 percent organic growth from Thermo Fisher.

Despite a number of questions from analysts, executives declined to reveal which Life Technologies products and assets Thermo Fisher will focus on bolstering and which ones will be phased out after the buy.

“We like the portfolio that Life Technologies brings and the intention is to focus on growing it and integrating it smoothly. So at this point, there’s no intention for pruning the portfolio from either of the companies,” said Casper.

This deal is one of several recent acquisitions for Thermo Fisher, a healthcare equipment company that earned $12.5 billion in revenues in 2012. Last September, the company acquired One Lambda, which provides diagnostic tests for transplant patients.

The transaction is still dependent upon Life Technologies’ shareholder approval, but is expected to close sometime in early 2014.

News of the sale caused a spike in Life Technologies NASDAQ stock prices from about $68 per share at closing on April 12, to $73 at closing on April 15.

 

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