Thermo Fisher Scientific to Buy FEI for $4.2 Billion

By Anne Steele 

Lab-equipment company Thermo Fisher Scientific Inc. on Friday said it reached a deal to acquire microscope-technology maker FEI Co. for $4.2 billion in cash.

The purchase price, at $107.50 a share, represents a 14% premium to FEI's closing price on Thursday. The maker of high-end electron microscopes will join Thermo Fisher's analytical instruments segment.

"In life sciences, there is growing adoption of electron microscopy to study the structure of proteins," said Thermo Fisher Chief Executive Marc Casper. "The technologies we gain with FEI will complement our mass spectrometry leadership," which he said will allow Thermo Fisher to benefit from the trend.

The technology that FEI has pioneered is in structural biology--the study of proteins in the body--a key in drug research.

"That's growing in importance for our biopharma customers," Mr. Casper said in an interview, adding that those companies account for 30% of Thermo Fisher's revenue.

"Those customers are very excited about what's going on with electron microscopy," he said.

Analysts at Leerink called the acquisition a "logical fit" since "electron microscopy represented a gap in Thermo's scientific instruments offering."

FEI, Hillsboro, Ore., has more than 3,000 employees world-wide with operations primarily in Europe and the U.S. Mr. Casper said the business, which posted $930 million in revenue last year, will immediately add to Thermo Fisher's earnings.

The deal is expected to close by early 2017 and add $1 billion in revenue and 30 cents a share to earnings in the first year.

Thermo Fisher in March completed its acquisition of Affymetrix Inc. for $1.3 billion, following the genetics firm's rejection earlier of a higher rival bid submitted by former executives of the company.

It previously added Life Technologies Corp. in February 2014 for $13.6 billion and allergy-testing firm Phadia AB for EUR2.5 billion in 2011.

On Thursday, Mr. Casper said the FEI deal is part of $12 billion Thermo Fisher plans to spend on acquisitions through 2019.

"We'll continue to be active," he said.

Shares of Thermo Fisher added 0.3% midday to $151.64, while shares of FEI climbed 14% to 107.55%.

Write to Anne Steele at [e-mail]

(END) Dow Jones Newswires

May 27, 2016 11:38 ET (15:38 GMT)

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