Based in Waltham, Massachusetts, Thermo Fisher Scientific is a behemoth in the area of laboratory research products, featuring a wide range of stem cell product lines. As cited in the press release below, the company announced January 8th, 2016, that it will be acquiring the Affymetrix, a company based in Santa Clara, California, that manufactures DNA microarrays. The move will expand Thermo Fisher Scientific’s portfolio of “premier brands” that include Thermo Scientific, Applied Biosystems, Invitrogen, Fisher Scientific and Unity Lab Service, among many others.
While a purchase price of $1.3 billion sounds like a significant acquisition, Thermo Fisher Scientific has a market capitalization of $56.3 billion and revenues of approximately $17 billion, as well as more than 50,000 employees worldwide. Put into context, this is another in a long line of strategic acquisitions by Thermo Fisher Scientific.
The full press release by Thermo Fisher Scientific is included below.
PRESS RELEASE – Thermo Fisher Scientific to Acquire Affymetrix
- Strengthens Leadership in Biosciences and Genetic Analysis
- Significantly Expands Portfolio of Antibodies and Assays for High-Growth Flow Cytometry and Single-Cell Biology Applications
- Adds Complementary Genetic Analysis Products Serving Research, Clinical and Applied Markets
- Offers Opportunity to Leverage Thermo Fisher’s Commercial and Geographic Scale
- Creates Attractive Financial Benefits; Expected to be Immediately Accretive to Adjusted Earnings per Share (EPS)
January 08, 2016; WALTHAM, Mass. & SANTA CLARA, Calif.– Thermo Fisher Scientific Inc. (NYSE:TMO), the world leader in serving science, and Affymetrix Inc. (NASDAQ:AFFX), a leading provider of cellular and genetic analysis products, today announced that their boards of directors have unanimously approved Thermo Fisher’s acquisition of Affymetrix for $14.00 per share in cash. The transaction represents a purchase price of approximately $1.3 billion.
Affymetrix’s technologies enable parallel and multiplex analysis of biological systems at the cellular, protein and genetic level, facilitating the transition of research tools into clinical and applied markets. The company’s products are used by customers working in life sciences and translational research, molecular diagnostics, reproductive health and agricultural biotechnology. Based in Santa Clara, California, Affymetrix has approximately 1,100 employees worldwide and maintains sales and distribution operations primarily in the U.S., Europe and Asia. The business, which has annual revenues of approximately $350 million, will be integrated into Thermo Fisher’s Life Sciences Solutions Segment.
“The acquisition of Affymetrix will strengthen our leadership in biosciences and create new market opportunities for us in genetic analysis,” said Marc N. Casper, president and chief executive officer of Thermo Fisher Scientific. “In biosciences, the company’s antibody portfolio will significantly expand our offering in the fast-growing flow cytometry market, and customers will have greater access to these products through our global scale and commercial reach. In genetic analysis, Affymetrix’s technologies are highly complementary and present new opportunities for us in targeted clinical and applied markets. For shareholders, we expect the transaction to create value by generating attractive financial returns, including immediate accretion to our adjusted EPS.”
Frank Witney, president and chief executive officer of Affymetrix, said, “Joining Thermo Fisher creates significant value for our customers, employees and shareholders. We will be able to build on our strong history of close collaboration with customers in our target markets by leveraging Thermo Fisher’s deep relationships, particularly in biopharma, as well as their global scale and leading presence in Asia-Pacific. We are excited about the opportunity to combine our portfolios and strengthen our position in high-growth markets such as single-cell biology, reproductive health and AgBio. Our employees will benefit by being part of an industry-leading company, which brings many opportunities for career growth and development. We look forward to working closely with the Thermo Fisher team to ensure a smooth transition and integration.”
Casper concluded, “We’re pleased to welcome our new colleagues from Affymetrix to Thermo Fisher. Frank Witney and the entire Affymetrix team have done a great job of strengthening the business, and we’re excited about the opportunity to leverage Thermo Fisher’s scale and depth of capabilities to build on that momentum and accelerate growth.”
Benefits of the Transaction
- Significantly Expands Antibody Portfolio to Strengthen Leadership in Biosciences.Affymetrix’s eBioscience offering for cellular analysis will enhance Thermo Fisher’s leading biosciences capabilities. Specifically, the company specializes in a range of antibodies, multiplex RNA, and protein and single-cell assays. These technologies serve the fast-growing flow cytometry market segment as well as new high-growth applications including single-cell biology, immunotherapy and infectious disease research.
- Adds Genetic Analysis Capabilities Serving Clinical and Applied Markets. Affymetrix adds complementary products in genetic analysis that are used in cytogenetics, genotyping and gene expression. The company’s innovative microarray platform will strengthen Thermo Fisher’s presence in certain clinical and applied markets, including reproductive health and agricultural biotechnology.
- Offers Opportunity to Leverage Commercial and Geographic Scale. Affymetrixwill benefit from Thermo Fisher’s access to the biopharma industry through its unique customer value proposition, as well as its world-class e-commerce capabilities and extensive customer channels. Thermo Fisher will also significantly extend the geographic reach of Affymetrix’s products by leveraging its market presence and infrastructure in Asia-Pacific, particularly China.
- Creates Attractive Financial Benefits.The transaction is expected to be immediately accretive to Thermo Fisher’s adjusted EPS1, adding $0.10 of accretion in the first full year of ownership. Thermo Fisher expects to realize total synergies of approximately $70 million by year three following the close, consisting of approximately $55 million of cost synergies and approximately $15 million of adjusted operating income1 benefit from revenue-related synergies.
Approvals and Close
The transaction, which is expected to be completed by the end of the second quarter of 2016, is subject to the approval of Affymetrix shareholders and the satisfaction of customary closing conditions, including applicable regulatory approvals. Thermo Fisher intends to use cash on hand and short-term debt to finance the transaction.
About Thermo Fisher
Thermo Fisher Scientific Inc. (NYSE:TMO) is the world leader in serving science, with revenues of $17 billion and approximately 50,000 employees in 50 countries. Our mission is to enable our customers to make the world healthier, cleaner and safer. We help our customers accelerate life sciences research, solve complex analytical challenges, improve patient diagnostics and increase laboratory productivity. Through our premier brands – Thermo Scientific, Applied Biosystems, Invitrogen, Fisher Scientific and Unity Lab Services – we offer an unmatched combination of innovative technologies, purchasing convenience and comprehensive support. For more information, please visit www.thermofisher.com.
About Affymetrix
Affymetrix technologies enable multiplex and simultaneous analysis of biological systems at the cell, protein, and gene level, facilitating the rapid translation of benchtop research into clinical and routine use for human health and wellness. Affymetrix provides leadership and support, partnering with customers in pharmaceutical, diagnostic, and biotechnology companies as well as leading academic, government, and non-profit research institutes in their quest to use biology for a better world. More than 2,300 microarray systems have been shipped around the world and more than 94,000 peer-reviewed papers have been published citing Affymetrix technologies. Affymetrix is headquartered in Santa Clara, California, and has manufacturing facilities in Cleveland, San Diego, Vienna and Singapore. Affymetrix has about 1,100 employees and maintains sales and distribution operations worldwide. For more information about Affymetrix, please visit www.Affymetrix.com.
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