By Jessica Toonkel
Jan 6 Thermo Fisher Scientific Inc said
it would sell three businesses to General Electric Co's
healthcare unit for $1.06 billion, a deal that will enable
Thermo Fisher to secure European antitrust approval for its
acquisition of Life Technologies Corp.
In November, the European Union Thermo Fisher's $13.6
billion acquisition of Life Technologies, a deal that will make
it one of the top two genetic testing companies.
ISI Group analyst Ross Muken said the deal "is one of the
last pieces of the puzzle for the Life transaction to move
toward ultimate completion."
He called the price paid for the Thermo assets "very
attractive" and raised his price target on Thermo Fisher shares
to $121.50 from $111.
Thermo Fisher said its cell culture, gene modulation and
magnetic beads businesses, expected to have combined revenue of
about $250 million in 2013, will become part of GE Healthcare's
life sciences business.
GE was one of a handful of companies that bid for the Thermo
Fisher businesses being divested, according to a person familiar
with the situation who wished to remain anonymous because he is
not permitted to speak to the media. When Thermo Fisher's
acquisition of Life Technologies was announced last spring, a
number of healthcare companies and private equity firms
expressed interest, but only a handful were invited to bid, the
The cell culture business bought by GE produces liquids used
to develop biotech medicines and vaccines.
GE said the magnetic beads products, used in microbiology
instruments, will be added to its existing technologies in
protein analysis and medical testing.
Thermo Fisher's gene modulation technologies will also aid GE
in drug research, Kieran Murphy, president and chief executive
of GE Healthcare Life Science's division, told Reuters.
GE sees the acquisition as a complementary addition to its
business as it believes that bioprocessing and particularly cell
therapy will continue to grow at a fast pace in years to come,
"These are going to be high single digit, low double digit
growth areas, so we have been extremely good about playing that
space," Murphy said.
GE Healthcare is not looking to make any more acquisitions
imminently, Murphy said. "We will look at things, but we are not
looking to buy growth at this point, he said. "We don't need
Thermo Fisher said it does not expect any more divestitures
would be necessary to receive U.S. approval for the deal, which
is expected to close early this year. ISI Group's Muken said he
sees the closing of the Life acquisition as soon as this month
as still possible.
Citigroup served as the financial adviser and Hogan
Lovells served as the legal adviser to GE Healthcare, while
Barclays and Wilmer Cutler Pickering Hale & Dorr LLP
served as the advisers to Thermo Fisher.
Thermo Fisher shares were down 37 cents to $109.68, while
GE shares were off 17 cents at $27.31 in afternoon trading on
the New York Stock Exchange.