close

Mergers and Acquisitions

Date: 2017-05-15

Type of information: Company acquisition

Acquired company: Patheon (USA - NC)

Acquiring company: Thermo Fisher Scientific (USA - MA)

Amount: $7.2 billion

Terms:

  • • On May. 15, 2017, Thermo Fisher Scientific and Patheon announced that their boards of directors have approved Thermo Fisher's acquisition of Patheon. Thermo Fisher will commence a tender offer to acquire all of the issued and outstanding shares of Patheon for $35.00 per share in cash. The transaction represents a purchase price of approximately $7.2 billion, which includes the assumption of approximately $2.0 billion of net debt.
  • Patheon generated 2016 revenue of approximately $1.9 billion and will become part of Thermo Fisher's Laboratory Products and Services Segment.  The transaction is expected to be immediately and significantly accretive to Thermo Fisher's adjusted EPS1 by $0.30 in the first full year after close. Thermo Fisher expects to realize total synergies of approximately $120 million by year three following the close, consisting of approximately $90 million of cost synergies and approximately $30 million of adjusted operating income1 benefit from revenue-related synergies.
  • The transaction, which is expected to be completed by the end of 2017, is subject to the satisfaction of customary closing conditions, including the receipt of applicable regulatory approvals, the adoption of certain resolutions relating to the transaction at an Extraordinary General Meeting of Patheon's shareholders, and completion of the tender offer. Thermo Fisher has entered into tender and support agreements with affiliates of JLL Partners and Royal DSM, whose collective holdings represent approximately 73% of Patheon shares, under which they will tender their shares in the transaction.
  • Thermo Fisher has obtained committed debt financing from Goldman Sachs Bank USA and Goldman Sachs Lending Partners. The company expects to finance the purchase price with debt of approximately $5.2 billion and equity of approximately $2 billion. The offer is not subject to any financing condition.
  • Goldman Sachs & Co.is acting as financial advisor to Thermo Fisher, and Wachtell, Lipton, Rosen & Katz is serving as legal counsel. Morgan Stanley & Co is acting as financial advisor to Patheon, and Skadden, Arps, Slate, Meagher & Flom is serving as legal counsel.

Details:

  • Patheon is a global provider of high-quality drug development and delivery solutions to the pharmaceutical and biopharma sectors. The company is a leader in the high-growth, $40 billion CDMO market, which is fueled by growing customer demand for end-to-end solutions, flexible and scalable capacity, and regulatory expertise.
  • Patheon has an extensive network of state-of-the-art facilities primarily in North America and Europe, and approximately 9,000 professionals worldwide.
  • The combination with Thermo Fisher is adding complementary services for pharmaceutical and biotech customers. Thermo Fisher is an outsourcing partner providing clinical trials logistics services. Combining these capabilities with Patheon's CDMO services will allow Thermo Fisher to be a stronger partner for pharmaceutical and biotech customers. Having biologics development and manufacturing capabilities as well as bioproduction technologies in one company will allow Thermo Fisher to offer a more comprehensive portfolio to gain share with these customers.

Related:

Is general: Yes