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Thermo Fisher Scientific to Acquire Electron Microscopy Firm FEI for $4.2B

NEW YORK (GenomeWeb) – Thermo Fisher Scientific announced today that it will acquire electron microscopy firm FEI Company for $4.2 billion in cash, or $107.50 per share.

Thermo Fisher President and CEO Marc Casper said in a statement that his company will use FEI's technology to complement its existing mass spectrometry business, particularly in its work on structural proteins and biopharmaceuticals.

"In life sciences, there is growing adoption of electron microscopy to study the structure of proteins. The technologies we gain with FEI will complement our mass spectrometry leadership, putting Thermo Fisher in the best position to capitalize on this important trend," he added. "We will also be able to leverage our global scale and commercial reach to extend the use of FEI’s products within our large biopharma customer base."

The combination of mass spec and cryo-electron microscopy has become a popular tool for structural protein work in recent years, allowing researchers to study structures not amenable to characterization by conventional crystallography methods.

By combining crosslinking mass spectrometry data — in which molecules are used to connect proteins at different points prior to mass spec analysis — with the structural information provided by cryo-EM, researchers are able to generate a picture of both the overall shape of a protein or protein complex as well as an understanding of the arrangement and orientation of individual proteins within the structure.

In addition to structural protein research, the acquisition expands Thermo Fisher's capabilities in the materials sciences and semiconductor markets.

Hillsboro, Oregon-based FEI has 3,000 employees and posted 2015 revenues of $930 million. Thermo Fisher said it expects the transaction to be accretive to its adjusted earnings per share by $.30 in the first full year after close, and expects to realize around $55 million in cost synergies and $25 million in revenue-related synergies by year three.

In a note to investors, Wells Fargo analyst Tim Evans suggested that while there are strategic rationales for the acquisition, it appears most valuable from a tax perspective, noting that "value creation seems to be increasingly from financial engineering."

He also said that the acquisition will push the company's revenue mix slightly in the direction of capital spending as opposed to recurring revenue, marking a change from other recent acquisitions by the company.

The transaction is expected to be completed by early 2017.

Thermo Fisher also recently completed its $1.3 billion acquisition of Affymetrix after weeks of upheaval and attempted disruption of the deal by former Affy executives. At the time, Casper said that the acquisition had given Thermo Fisher an expanded antibody portfolio that strengthened its leadership in the biosciences space, as well as "new genetic analysis capabilities to better serve clinical and applied markets."

Thermo Fisher's shares were down a fraction of a percent at $150.99 in morning trading on the Nasdaq. FEI's shares rose 14 percent to $107.49.

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