Thermo Fisher Scientific Inc. (NYSE: TMO), the world leader in serving science, today announced that it has signed a definitive agreement to acquire Phadia, a global leader in allergy and autoimmunity diagnostics, from European private equity firm Cinven, for €2.47 billion (or approximately $3.5 billion) in cash. The transaction, which is expected to be completed in the fourth quarter of 2011, is expected to be immediately accretive to Thermo Fisher's adjusted earnings per share and accretive by $0.26 to $0.30 per share in 2012.
“The acquisition of Phadia is a major step forward in our strategy to enhance Thermo Fisher's global presence in specialty diagnostics, one of our key growth platforms”
Based in Uppsala, Sweden, Phadia develops, manufactures and markets complete blood-test systems to support the clinical diagnosis and monitoring of allergy and autoimmune diseases. Since its founding in 1967, Phadia has been a pioneer in bringing new allergy diagnostic tests to market, and is the global leader for in vitro allergy diagnostics and a European leader in autoimmunity diagnostics. Phadia operates through two leading brands: ImmunoCAP® for allergy tests and EliA™ for autoimmunity tests. The company had 2010 total sales of €367 million (or approximately $525 million), representing a three-year compounded annual growth rate of 10% on a constant currency basis. Phadia will be part of Thermo Fisher's Specialty Diagnostics business within its Analytical Technologies Segment. Phadia has approximately 1,500 employees globally.
"The acquisition of Phadia is a major step forward in our strategy to enhance Thermo Fisher's global presence in specialty diagnostics, one of our key growth platforms," said Marc N. Casper, president and chief executive officer of Thermo Fisher. "This transaction will provide Thermo Fisher with leading allergy and autoimmunity diagnostic testing technologies that expand our specialty diagnostics offerings. 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. This transaction is another great example of our acquisition strategy to strengthen our position in growing markets, expand our customer offerings and create value for our shareholders."
"Thermo Fisher brings Phadia a significant opportunity to grow as part of the world leader in serving science," said Magnus Lundberg, Phadia's chief executive officer. "We share a culture of innovation and a strong focus on customers, and I am confident that this is a winning combination for our employees and customers around the world."
Casper continued, "We look forward to welcoming Phadia's talented employees to the Thermo Fisher team. Together, we will offer our customers a wider range of leading technologies to improve diagnostics, further supporting our mission of enabling our customers to make the world healthier, cleaner and safer."
Benefits of the Transaction
- Enhances Leadership Position in High-Growth, High-Margin Specialty Diagnostics: Phadia is the global leader for in vitro allergy testing and a European leader in autoimmunity diagnostic testing.
Allergy testing is an attractive, high-growth market, with in vitro allergy testing growing 9% a year globally. About one in five people in North America and Europe suffer from allergies. The in vitro allergy testing market has significant untapped potential for growth, particularly in the U.S., where in vitro testing is in the early stages of adoption, and in emerging markets, where there is low prevalence of allergy testing today.
Autoimmunity is also a growing segment of healthcare, with more than 100 million people worldwide suffering from autoimmune disorders, including celiac disease, rheumatoid arthritis and connective tissue diseases.
- Phadia's Leading Allergy and Autoimmunity Testing Technologies Expand Thermo Fisher's Depth of Capabilities to Improve Diagnostics: Phadia's ImmunoCAP brand is used to test for the widest range of specific allergens, and is the gold standard worldwide for in vitro allergy testing. Phadia's brand of autoimmunity tests, EliA, utilizes a common instrument platform to ImmunoCAP, offering quality that is superior to microtiter based products.
Phadia's allergy R&D efforts focus on developing new products that can identify patient sensitivity to a broad range of allergens. Phadia also has a robust pipeline of new biomarkers for autoimmunity testing in development.
Thermo Fisher will leverage Phadia's unique clinical marketing model to sell its specialty biomarker assays and other diagnostics products. Phadia will benefit from Thermo Fisher's extensive healthcare market channels in the U.S. and strong presence in emerging markets.
- Compelling Financial Benefits: The transaction is expected to be immediately accretive to Thermo Fisher's adjusted earnings per share and accretive by $0.26 to $0.30 per share in 2012. The transaction is expected to generate a total of $35 million of cost and revenue synergies in 2014, with $10 million generated in 2012. This includes $15 million from cost-related synergies and $20 million of adjusted operating income benefit from revenue-related synergies. The transaction is also expected to result in greater tax efficiencies by leveraging Thermo Fisher's global structure.
Financing and Approvals
Thermo Fisher intends to use proceeds from committed debt financing from Barclays Capital and cash on hand to facilitate the transaction. The transaction, which is expected to be completed in the fourth quarter of 2011, is subject to the satisfaction of customary closing conditions, including applicable regulatory approvals.