Thermo Expands Further into Specialty Diagnostics
Thermo may be contemplating other diagnostics acquisitions. The Wall Street Journal reported on May 19 that Thermo, as well as Life Technologies and Novartis, are among the bidders for diagnostics maker Gen-Probe. Thermo stated that the Phadia purchase will provide it with a leading position in high-margin specialty diagnostics; expand its capabilities in diagnostics, including in vitro allergy testing and specialty biomarker assays; and result in greater tax efficiencies. On its conference call discussing the deal, Thermo stated that Phadia would expand the pro forma 2010 revenues for its Specialty Diagnostics business by about 35% to $1.9 billion, with Phadia accounting for 28% of the business. Phadia products include the ImmunoCAP brand for allergy tests and the EliA brand for autoimmunity tests. Cinven stated that the company has more than 5,000 systems installed in over 3,000 labs. According to Fitch Ratings, the purchase price includes $2.1 billion of Phadia net debt.
Waltham, MA and Uppsala, Sweden 5/19/11; London, UK 5/19/11—Thermo Fisher Scientific has signed a definitive agreement to acquire Phadia, a provider of allergy and autoimmunity diagnostics, from private equity firm Cinven. Thermo will pay €2.47 billion ($3.5 billion = €0.71 = $1) in cash for Phadia. In 2010, Phadia had sales of €367 million ($525 million) and a three-year compound annual growth rate of 10% on a constant currency basis. “From a market perspective, Phadia has significant growth opportunities in the large, under-penetrated U.S. market, and can leverage our strong presence in emerging geographies to further accelerate growth,” stated Thermo President and CEO Marc N. Casper. Thermo expects the transaction to be immediately accretive to adjusted EPS and accretive by $0.26–$0.30 per share to 2012 adjusted EPS. The transaction is expected to generate $35 million of cost and revenue synergies in 2014, including $15 million from cost-related synergies. Phadia will become part of Thermo’s Specialty Diagnostics business within its Analytical Technologies segment. The acquisition should close in the fourth quarter.
