Waltham, MA-based Thermo Fisher Scientific (NYSE: TMO) said today it will pay $13.6 billion to acquire Carlsbad, CA-based Life Technologies (NASDAQ: LIFE) following an auction that began in January and initially drew interest from a consortium of private equity firms.
The deal combines two giants of the laboratory equipment and supply business just as the promise of low-cost genetic sequencing is opening important new markets for DNA sequencing, molecular diagnostics, genomics, proteomics, and other “omics” technologies.
Thermo Fisher has about 39,000 employees and generates about $13 billion in annual revenue. Life Technologies has about 10,000 employees, including 1,300 in the San Diego area, and reported sales of $3.8 billion in 2012.
Mark Stevenson, Life Technologies’ president and COO, is expected to have a significant leadership role in the combined company, which will be based in the Boston area. Thermo Fisher says the deal, approved by both boards, consists of about $9.5 billion in cash and debt, and equity of up to $4.0 billion. In addition, Thermo Fisher agreed to assume $2.2 billion in debt.
“We’re especially excited about the new opportunities we will have to leverage our complementary offerings, fueled by a shared commitment to continuous innovation,” Thermo Fisher CEO Marc Casper said in a statement.
The companies emphasized three benefits of the deal:
—Technology and innovation leadership. Life has next-generation sequencing capabilities, with a strong business supplying laboratory consumables for genomics, and molecular and cell biology. Thermo Fisher has market-leading leading business in analytical technologies and specialty diagnostics.
—Life does more than half of its orders online through a highly regarded e-commerce platform, while Thermo Fisher has global reach and commercial strength. The companies expect to expand in Asia.
— Thermo Fisher expects the transaction will immediately and significantly add to its earnings per share. The combination offers an opportunity to realize $275 million in new “operating income synergies” over the next three years, along with $25 million in “revenue synergies.”