Thermo Fisher Scientific this week announced that it will acquire Life Technologies for $13.6 billion in a deal that will bring together two of the largest providers of RNAi research products into a single entity.
The transaction also marks the latest in a series of mergers and acquisitions by both companies and their predecessors over the years that transformed the RNAi reagent field from a market served by small, niche players to one controlled by a few life science giants.
According to the companies, Thermo Fisher has agreed to pay $76 a share to buy Life Tech, and will assume $2.2 billion of its net debt. The acquisition is expected to close in early 2014, pending Life Tech shareholder approval and customary closing conditions.
As reported by GenomeWeb Daily News, the firms expect $275 million of adjusted operating income synergies in the third year following close of the deal, consisting of $250 million in cost synergies and $25 million in revenue synergies.
It will also combine two of the broadest lines of RNAi research tools.
Thermo Fisher currently offers a number of RNAi products including the On-Target Plus line of chemically modified siRNAs; Accell siRNAs, which require no transfection reagents; and Lincode siRNAs, which are designed to target long, non-coding RNAs. The company also offers a series of shRNAs for inducible and long-term gene silencing, as well as siRNA and shRNA libraries for RNAi screens, RNAi oligos for in vivo experiments, and miRNA mimics and inhibitors.
Life Tech, meantime, sells its line of Silencer Select chemically modified siRNAs; MirVana miRNA mimics and antagonists; and Lipofectamine transfection reagents. It also sells vector-expressed shRNAs, siRNAs targeting ncRNAs, and siRNAs designed for in vivo gene knockdown.
Given the significant overlap between the two companies’ RNAi/miRNA portfolios, it is unclear if Thermo Fisher will be required by regulators to sell off some of the gene-silencing products.
During a conference call held this week to discuss the acquisition, Thermo Fisher President and CEO Marc Casper said that no divestiture plans are being made at the moment and the focus is on growing the combined company’s entire portfolio.
However, Leerink Swann analyst Dan Leonard wrote in a research note that "smaller pieces of the combined [Life/Thermo Fisher] portfolio might need to find new homes to enable this combination, which creates an opportunity for peers."
Still, Ross Muken, senior managing director and partner at investment firm ISI Group, doesn’t expect the combined company’s RNAi offerings to face any issues, telling Gene Silencing News that while the acquisition “creates a very powerful franchise in RNAi,” the market for such products remains broadly “competitive.”
Other companies competing in the RNAi research product space include Qiagen, Sigma-Aldrich, and Bio-Rad.
With the tie-up between Thermo Fisher and Life Tech, a large swath of RNAi research products and technologies that started out in the hands of a few independent companies will be brought together, continuing a trend of consolidation that began when Invitrogen acquired Sequitur in late 2003 (GSN 11/7/2003).
Key to that deal was Sequitur’s line of Stealth RNAi oligos, which joined Life Tech’s stable of research reagents when that company was created out of the 2008 merger between Applied Biosystems and Invitrogen.
Then, in early 2004, Fisher Scientific bought RNAi reagent pioneer Dharmacon for $80 million in cash, picking up a variety of product lines including OnTarget and Accell (GSN 2/13/2004).
A couple of years later, Ambion’s line of RNAi reagents and technologies, which included the SilencerSelect line, were acquired by Applied Biosystems as part of a $273 million buyout of Ambion’s research products division (GSN 1/5/2006).
That same year, Fisher Scientific merged with Thermo Electron to form Thermo Fisher. In 2008, ABI merged with Invitrogen to form Life Tech, bringing the Ambion and Sequitur technologies together under one banner.
Also in 2008, Thermo Fisher acquired Open Biosystems, which sold a variety of genomics research tools including a portfolio of shRNA libraries, delivery systems, and related technologies (GSN 7/3/2008).