Thermo Electron and Fisher Scientific to Combine in Industry-Transforming Transaction

WALTHAM, Mass. & HAMPTON, N.H.–Thermo Electron Corporation (NYSE: TMO – News) and Fisher Scientific International Inc. (NYSE: FSH – News): Thermo Electron Corporation (NYSE: TMO – News) and Fisher Scientific International Inc. (NYSE: FSH – News) announced today that the boards of directors of both companies have unanimously approved a definitive agreement to combine the two companies in a tax-free, stock-for-stock exchange. The transforming merger will create the leading provider of laboratory products and services in the high-growth life, laboratory and health sciences industry. The new company will be named Thermo Fisher Scientific Inc. and is expected to have 2007 revenues of more than $9 billion. Thermo and Fisher have complementary technology leadership in instrumentation, life science consumables, software and services. By combining these capabilities, the company will be uniquely positioned to provide integrated, end-to-end technical solutions. Thermo Fisher Scientific will have an industry leading global sales and service organization with nearly 7,500 professionals serving its customers worldwide. Under the terms of the agreement, Fisher shareholders will receive 2.00 shares of Thermo common stock for each share of Fisher common stock they own. Based on Thermo’s closing price of $39.45 per share on May 5, 2006, this represents a value of $78.90 per Fisher share, or an aggregate equity value of $10.6 billion, not including net debt of $2.2 billion. Upon completion of the transaction, Thermo’s shareholders would own approximately 39 percent of the combined company, and Fisher shareholders would own approximately 61 percent. The transaction will be treated as a reverse merger with Thermo as the acquirer. Marijn E. Dekkers, president and chief executive officer of Thermo, will become president and chief executive officer of the combined company, and Paul M. Meister, vice chairman of the board for Fisher, will become chairman of the board of the combined company. Following the close of the transaction, Paul M. Montrone, chairman and chief executive officer of Fisher, will be stepping aside in support of the new management team. He will be concentrating on launching new business opportunities and will remain an adviser to the company. Jim P. Manzi, chairman of the board of Thermo, will serve on the board of directors of the combined company. Thermo Fisher Scientific’s board of directors will be comprised of eight members, with five nominated by Thermo and three nominated by Fisher. Benefits of the Transaction Strategic combination. The merger creates the world’s only provider of fully integrated, end-to-end solutions in the life, laboratory and health sciences industry. Accretive to earnings. Thermo expects 2007 adjusted earnings per share of the combined company to be in the range of $2.27 to $2.37, reflecting accretion of approximately 18 percent to Thermo’s consensus 2007 adjusted EPS. Accelerates revenue and earnings growth. The merger accelerates revenue growth and is expected to result in a 20 percent compound annual growth rate in adjusted EPS over three years. $200 million of synergies. The transaction is expected to generate $200 million of cost and revenue-related synergies in three years. 2007 synergies are expected to be at least $75 million. $150 million of cost-related synergies, excluding one-time costs, are expected to result primarily from manufacturing rationalization, sourcing and logistics efficiencies, and shared administrative functions. $50 million of revenue-related synergies are expected to result from cross-selling opportunities, enhanced geographic reach, penetration of new and existing markets, and new solutions development. Strong cash flow and financial flexibility. Operating cash flow is expected to be in excess of $1 billion in 2007. With its solid balance sheet and strong cash flow, the combined company will be well-positioned to accelerate growth both organically and through acquisitions. In addition, the Thermo Electron board has increased the current authorization of its buyback program to $300 million. Talented employee base. Both Thermo and Fisher have exceptional teams of talented and experienced employees. This combination of industry leaders is expected to benefit customers and suppliers, and provide greater opportunities for the 30,000 employees of the combined company. Thermo Fisher Scientific will be headquartered in Waltham, Mass., and will continue to have an office in Hampton, N.H. Approvals and Time to Close The transaction is subject to approval by both companies’ shareholders as well as customary closing conditions and regulatory approvals. The transaction is expected to close in the fourth quarter of 2006.

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