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Thermo Fisher Scientific to Buy Qiagen for $11.5B

This article has been updated to include information from a Thermo Fisher Scientific conference call.

NEW YORK – Thermo Fisher Scientific will acquire Qiagen for $11.5 billion, the companies announced early Tuesday morning.

Thermo Fisher will pay €39 ($43.35) per share of Qiagen's stock in cash, representing a premium of about 23 percent on the closing price of Qiagen's common stock on the Frankfurt Prime Standard on March 2, the last trading day prior to the announcement of the deal. The deal also includes the assumption of about $1.4 billion of net debt.

"This acquisition provides us with the opportunity to leverage our industry-leading capabilities and R&D expertise to accelerate innovation and address emerging healthcare needs," Thermo Fisher Chairman, President, and CEO Marc Casper said in a statement. "For shareholders, we expect the transaction to be immediately accretive and to generate significant cost and revenue synergies."

In a conference call Tuesday morning to discuss the planned acquisition, Casper explained that Qiagen, which has 5,100 employees in more than 25 countries and had $1.53 billion revenues last year, has an attractive revenue profile with revenues split almost equally between molecular diagnostics and life sciences; almost 90 percent of revenues coming from consumables with the remainder from instruments and services; and almost half of revenues deriving from the Americas, with 32 percent from EMEA countries and 21 percent from Asia-Pacific and the rest of the world.

In particular, Qiagen will expand Thermo Fisher's specialty diagnostics portfolio with its molecular diagnostics offerings, including infectious disease testing. In addition, Qiagen will complement Thermo Fisher's life sciences products with its sample prep technologies, assays, and bioinformatics solutions.

Thermo Fisher plans to expand access to Qiagen's products further through its extensive commercial network across the world.

On the clinical testing side, Casper highlighted Qiagen's Quantiferon-TB Gold Plus latent tuberculosis detection test, which adds to Thermo Fisher's existing allergy and autoimmunity as well as transplant diagnostics tests. Also, Qiagen's QiaSymphony platform for molecular diagnostics infectious disease testing, its QiaStat-Dx syndromic testing system, companion diagnostic offering, and bioinformatics capabilities will complement Thermo Fisher's own genetic analysis technologies, which include qPCR, next-generation sequencing, Sanger sequencing, and microarrays.

On the life sciences side, Qiagen's sample prep technologies, emerging digital PCR capabilities, and bioinformatics solutions will add to Thermo Fisher's existing reagents and consumables and its genetic analysis platforms.

Rumors had been swirling about a potential acquisition of Qiagen since late last year following the departure of Peer Schatz as the company's CEO. At the same time, the firm also discontinued developing its next-generation sequencer, while it announced disappointing third quarter revenues and reduced its full-year 2019 sales guidance on continued weakness in China. 

In November, Bloomberg reported that Qiagen could be an acquisition target for Thermo Fisher, while Qiagen said that it had received interest from several companies as possible acquisition partners.

The deal is anticipated to close in the first half of 2021, pending customary closing conditions that include applicable regulatory approvals, approval from Qiagen shareholders, and completion of the tender offer. Thermo Fisher said that the deal is expected to add $0.6 to adjusted EPS within the first 12 months after the deal closes. It expects total synergies of $200 million by year three after the close, consisting of $150 million of cost synergies and $50 million of adjusted operating income benefit from $100 million of revenue synergies.

To pay for the acquisition, Thermo Fisher has put bridge financing in place and expects permanent funding to come from cash on hand and the issuance of new debt. The company noted that the transaction is not subject to any financing conditions.

JP Morgan Securities and Morgan Stanley are financial advisors to Thermo Fisher on the deal. Goldman Sachs is the lead financial advisor to Qiagen while Barclays Bank is also serving as a financial advisor.

In mid-morning trading on the Nasdaq, Thermo Fisher's shares were up 5.8 percent, at $322.56, while Qiagen's shares were up 15 percent, at $41.55.

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