Product category:
Manufacturing dealerships, agencies and acquisitions
News Release from: Thermo Fisher Scientific
Edited by the Manufacturingtalk Editorial
Team on 22 May 2006
Thermo Electron and Fisher Scientific
combine
Thermo Electron Corporation and Fisher Scientific International have unanimously approved a definitive agreement to combine the two companies in a tax-free, stock-for-stock exchange.
Thermo Electron Corporation and Fisher Scientific International have announced 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
This article was originally published on Manufacturingtalk on 1 Aug 2008 at 8.00am (UK)
Related stories
Metals analyser has time resolved spectroscopy
Thermo Fisher Scientific has enhanced its ARL 4460 optical emission spectrometry (OES) metals analyzer to offer unmatched performance, accuracy, stability, reliability and speed of analysis.
Software aids metals analysis automation
Thermo Fisher Scientific has introduced Thermo Scientific ARL SMS version 6 software features a common software platform covering the instrument and automation.
The new company will be named Thermo Fisher Scientific and is expected to have 2007 revenues of more than US$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.
Further reading
Spectrometer gives fast, reliable metals analysis
A compact spectrometer for fast and reliable analysis in metals has automatic sample preparation and handling, while analysis and distribution of results is also automated.
Crystal orientations analysed speedily, accurately
Advanced orientation imaging microscopy is for analyzing crystal orientations in materials and provides a sophisticated combination of speed, accuracy and flexibility in production environments.
Chinese win for Thermo Fisher
Sinopec has decided to implement Thermo Scientific SampleManager LIMS, Atlas CDS and GRAMS enterprise software throughout multiple laboratories
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 US$39.45 per share on May 5, 2006, this represents a value of US$78.90 per Fisher share, or an aggregate equity value of US$10.6 billion, not including net debt of US$2.2 billion.
Upon completion of the transaction, Thermo's shareholders would own approximately 39% of the combined company, and Fisher shareholders would own approximately 61%.
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.
"This combination brings together two well-respected industry leaders in the life, laboratory and health sciences marketplace to create a company that has the product breadth, global reach and operational expertise to drive significant value for shareholders, customers and employees," said Dekkers.
"Both Thermo and Fisher have strong track records of acquisition success and margin expansion.
By combining our companies' complementary world-class product and service offerings with Fisher's unparalleled customer access, we expect to accelerate growth by further penetrating our vast customer base.
Our customers will benefit from a partnership that can provide integrated, end-to-end application solutions to reduce their costs and increase efficiency.
Our companies and employees share a strong commitment to our customers, and I am pleased to bring the talented employees of these two great companies together." Montrone said: "For more than 100 years, Fisher has played an important role in aiding scientific discovery.
Our focus on supplying innovative product and service solutions has enabled our 350,000 customers to concentrate on what they do best - improving health and extending life.
Thermo has an equally solid record, and the combined company will be well-positioned to deliver accelerated earnings growth for shareholders." Meister added, "This is a great transaction that provides Fisher shareholders with enhanced value both today and over the long-term.
The upside potential we see as a result of our combination is compelling.
By leveraging the operating expertise at both companies, we anticipate realizing the strategic and financial benefits of this transaction quickly and efficiently." Benefits of the transaction are as follows.
* 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 US$2.27 to US$2.37, reflecting accretion of approximately 18% 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.
* US$200 million of synergies - the transaction is expected to generate US$200 million of cost and revenue-related synergies in three years.
2007 synergies are expected to be at least US$75 million.
US$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.
US$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 US$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 programme to US$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, Massachusetts, USA, and will continue to have an office in Hampton, New Haven.
* 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.
* Advisers - in connection with the transaction, Lehman Brothers and Rothschild are acting as financial advisers to Thermo, and Wachtell, Lipton, Rosen and Katz is legal counsel.
Goldman, Sachs and Co and Lazard Freres and Co are acting as financial advisers to Fisher, and Skadden, Arps, Slate, Meagher and Flom is legal counsel.
* About Fisher Scientific - Fisher Scientific International (NYSE: FSH) is a leading provider of products and services to the scientific community.
Fisher facilitates discovery by supplying researchers and clinicians in labs around the world with the tools they need.
We serve pharmaceutical and biotech companies; colleges and universities; medical-research institutions; hospitals; reference, quality-control, process-control and R and D labs in various industries; as well as government agencies.
From biochemicals, cell-culture media and proprietary RNAi technology to rapid-diagnostic tests, safety products and other consumable supplies, Fisher provides more than 600,000 products and services.
This broad offering, combined with Fisher's globally integrated supply chain and unmatched sales and marketing capabilities, helps make our 350,000 customers more efficient and effective at what they do.
Founded in 1902, Fisher Scientific is a 'Fortune 500' company and is a component of the S and P 500 Index.
With approximately 19,500 employees worldwide, the company had revenues of US$5.6 billion in 2005.
Fisher Scientific is a company committed to delivering on our promises - to customers, shareholders and employees alike.
* About Thermo Electron - Thermo Electron Corporation is the world leader in analytical instruments.
Our instrument solutions enable our customers to make the world a healthier, cleaner and safer place.
Thermo's Life and Laboratory Sciences segment provides analytical instruments, scientific equipment, services and software solutions for life science, drug discovery, clinical, environmental and industrial laboratories.
Thermo's Measurement and Control segment is dedicated to providing analytical instruments used in a variety of manufacturing processes and in-the-field applications, including those associated with safety and homeland security.
• Thermo Fisher Scientific: contact details and other news
• Email this article to a colleague
• Register for the free Manufacturingtalk email newsletter
• Manufacturingtalk Home Page
Search the Pro-Talk network of sites
