americanpharmaceuticalreviewMay 16, 2017
Tag: Thermo Fisher , acquisition
Thermo Fisher Scientific and Patheon announced their boards of directors have approved Thermo Fisher's acquisition of Patheon. Thermo Fisher will commence a tender offer to acquire all of the issued and outstanding shares of Patheon for $35.00 per share in cash. The transaction represents a purchase price of approximately $7.2 billion, which includes the assumption of approximately $2.0 billion of net debt.
Patheon provides integrated and customizable solutions to help biopharmaceutical companies of all sizes satisfy complex development and manufacturing needs. Patheon has a network of state-of-the-art facilities primarily in North America and Europe, and approximately 9,000 professionals worldwide. The company generated 2016 revenue of approximately $1.9 billion and will become part of Thermo Fisher's Laboratory Products and Services Segment.
"Patheon's development and manufacturing capabilities are an excellent complement to our industry-leading offering for the biopharma market," Marc N. Casper, president and chief executive officer of Thermo Fisher Scientific said. "Our combined capabilities will enhance our unique value proposition for these customers, create significant value for our shareholders and further accelerate our company's growth."
Patheon serves a fragmented market which is fueled by strong demand for outsourcing services that allow customers to simplify their supply-chain networks. By offering both small- and large-molecule development and manufacturing solutions, the company helps customers reduce the time and cost of delivering medicines to market.
The transaction is expected to be immediately and significantly accretive to Thermo Fisher's adjusted EPS by $0.30 in the first full year after close. Thermo Fisher expects to realize total synergies of approximately $120 million by year three following the close, consisting of approximately $90 million of cost synergies and approximately $30 million of adjusted operating income1 benefit from revenue-related synergies.
The transaction, which is expected to be completed by the end of 2017, is subject to the satisfaction of customary closing conditions, including the receipt of applicable regulatory approvals, the adoption of certain resolutions relating to the transaction at an Extraordinary General Meeting of Patheon's shareholders, and completion of the tender offer. Thermo Fisher has entered into tender and support agreements with affiliates of JLL Partners and Royal DSM, whose collective holdings represent approximately 73% of Patheon shares, under which they will tender their shares in the transaction.
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