Thermo Fisher Scientific Inc. (MA, USA) is set to buy Patheon (NC, USA) for $5.2 billion. The purchase of Patheon will complement Thermo Fisher’s offerings in production and services for the biopharma industry.
At $35 per share, the offer price will add around 35% to Patheon’s Friday close. The total cost of the deal is around $7.2 billion for Patheon as Thermo will assume $2 billion in net debt.
Patheon’s capabilities in drug manufacturing will allow Thermo Fisher to gain more ground in the fragmented contract development and manufacturing market, which is estimated to be worth $40 billion.
“Patheon’s development and manufacturing capabilities are an excellent complement to our industry-leading offering for the biopharma market,” commented Marc Casper (President and Chief executive officer of Thermo Fisher). “Our combined capabilities will enhance our unique value proposition for these customers, create significant value for our shareholders and further accelerate our company’s growth.”
Expected to be completed by year end, the deal will add to Thermo Fisher’s adjusted profit by 30 cents a share in the first full year after close. “This deal could help solidify Thermo Fisher’s multi-year core growth reacceleration,” stated Evercore International Strategy & Investment (NY,USA)analyst Ross Muken, who commented that the forecast was conservative and could potentially add 35-40 cents a share to earnings.
“We put out numbers that we feel incredibly high confidence in our ability to achieve,” commented Casper. He also stated the forecast will be updated once the deal closes.
Greater long-term potential growth was predicted by Casper, stating: “There are very interesting opportunities to build out their footprint in Asia-Pacific, where they have not yet really penetrated.”
Sources: Thermo Fisher Scientific press release http://news.thermofisher.com/press-release/thermo-fisher-scientific-acquire-patheon-leading-contract-development-and-manufacturin; www.reuters.com/article/us-patheon-m-a-thermo-fisher-idUSKCN18B1C4
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