Thermo to Buy Life Technologies for $13.6 Billion
Reuters reported that Sigma-Aldrich and a private equity consortium, consisting of Blackstone Group, Carlyle Group, KKR & Co. and Temasek Holdings, also submitted bids to acquire Life. Thermo stated in a conference call that it expects to add $0.90–$1.00 to adjusted EPS in the first full year following the acquisition. Synergies in the first full year are expected to total $85 million. Due to an anticipated annual cash flow of more than $2.5 billion following the purchase, Thermo expects to reduce its debt to 2.5–3 times EBITDA by the end of the second year following the transaction. (For more, see page 1.)
Waltham, MA and Carlsbad, CA 4/15/13—Thermo Fisher Scientific will acquire Life Technologies for $76.00 per fully diluted common share, or $13.6 billion (see IBO 3/31/13). This is a 7.5% premium over Life’s closing price on the prior trading day. Thermo will also assume Life’s net debt, which totaled $2.2 billion at the end of 2012. “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,” stated Thermo Fisher Scientific President and CEO Marc N. Casper. Thermo will fund the acquisition with $10.0 billion in debt, $9.5 billion in cash and up to $4.0 billion in equity. Thermo expects to generate adjusted operating income synergies of $275 million in the third year, consisting of $250 million of cost synergies and $25 million of revenue synergies. Life Technologies President and COO Mark R. Stevenson will have a leadership role at Thermo, and Thermo will elect a member of Life Technologies’ Board to its Board. The transaction is expected to close in early 2014.
