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Thermo Fisher Contacted Life Tech in 2011 about Possible Acquisition; Document Discloses Other Bidders

NEW YORK (GenomeWeb News) – Thermo Fisher Scientific first contacted Life Technologies about a possible merger more than a year-and-a-half ago with a proposed deal at $58 per share, Life Technologies said in a proxy statement filed on Tuesday.

In the proxy, which also encourages shareholders to vote in favor of the proposed $13.6 billion sale of Life Tech to Thermo Fisher, Life Tech provides further details that led to the deal, which was announced last month, including bids by other unnamed suitors.

Word first leaked in January that the Carlsbad, Calif.-based company was entertaining a possible sale, but the seeds of its pending sale to Thermo Fisher were planted in September 2011 when Thermo Fisher CEO Marc Casper sent a letter to Life Tech saying "it had a strong interest in entering into formal discussions regarding a potential business combination." At the time, Thermo Fisher proposed a valuation of $58 per share for Life Tech and proposed a stock and cash deal.

During that month, Life Tech's shares were trading between $36.49 and $42.12. After reviewing the offer, however, Life Tech's board determined that remaining as a stand-alone company would serve shareholders better and it turned down Thermo Fisher.

Even before Casper's letter, though, during the summer of 2011, an unnamed private equity firm had contacted Life Tech CFO David Hoffmeister about a possible acquisition of the company. The firm remained in contact with Hoffmeister throughout the rest of 2011 and in January 2012, he along with Life Tech CEO Greg Lucier had an introductory meeting with representatives of the private equity firm.

Life Tech said that before it and Thermo Fisher finalized their agreement last month, at least 10 other parties would express interest in acquiring Life Tech and made offers. Those firms consisted of private equity firms, other types of financial firms, and strategic buyers.

A total of five strategic buyers would eventually become involved in the bidding process, including one company identified by Life Tech in its proxy as Strategic Party B, which was interested mainly in buying Life Tech's sequencing business but might also have wanted to buy all of Life Tech.

Life Tech said that in January, shortly after reports surfaced that it was seeking a buyer and hired two investment banks, Deutsche Bank Securities and Moelis & Co, as advisors for a strategic review of its business, four strategic companies contacted Life Tech or one of the investment banks "to express preliminary interest in acquiring particular portions or segments" of Life Tech. None of the four firms, however, were interested in buying the company in whole, Life Tech noted.

In the weeks that followed, a number of bids were made to Life Tech, including an offer by Thermo Fisher on Feb. 25 at a price range of $65 to $68 per share. Around the same time, Life Tech also determined that Strategic Party B — who was mainly interested in Life Tech's sequencing business — had partnered with another strategic buyer rather than make its own offer, Life Tech said.

Life Tech did not identify the two companies, but Reuters reported that Roche was Strategic Party B and Sigma-Aldrich was its partner, Strategic Party A.

Life Tech declined to comment to GenomeWeb Daily News. Roche, and Sigma-Aldrich did not respond to requests for comment.

On April 14, Life Tech received its last bid of $76 per share from Strategic Party A, matching the share price that Thermo Fisher offered a day earlier. Life Tech's management, its board, and advisors Deutsche Bank and Moelis then met to compare the competing bids.

They also discussed a $65 per share offer from a consortium of private equity firms, although a day earlier Life Tech's board and its advisors decided that, in spite of some aspects of the offer that made it more favorable than Thermo Fisher's and Strategic Party A's bids, the price disparity was too great.

In comparing the bids from Thermo Fisher and Strategic Party A, Life Tech and its advisors considered "the consideration mix, the more favorable merger agreement provisions that had been negotiated with Thermo Fisher … and Thermo Fisher's status as a larger, financially stronger company than Strategic Party A," Life Tech said.

Its board unanimously approved the merger with Thermo Fisher. The deal is anticipated to be completed in early 2014.

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