Thermo Fisher to buy Qiagen for $11.5bn

May 2020 | DEALFRONT | MERGERS & ACQUISITIONS

Financier Worldwide Magazine

May 2020 Issue

In a deal which gives it a foothold in the fast-growing molecular diagnostic market, global life sciences company Thermo Fisher Scientific is to acquire diagnostic test manufacturer Qiagen for $11.5bn, including the assumption of approximately $1.4bn of net debt.

Under the terms of the agreement, Thermo Fisher will acquire Qiagen for €39 per share in cash, a deal which has been unanimously approved by Thermo Fisher’s board of directors, as well the managing board of Qiagen. Additionally, Thermo Fisher will commence a tender offer to acquire all of the ordinary shares of Qiagen.

To facilitate the transaction, Thermo Fisher has obtained committed bridge financing, with permanent funding expected to come from cash on hand and the issuance of new debt. The transaction is not subject to any financing condition.

“We are excited to bring together our complementary offerings to advance our customers’ important work, from discovery to diagnostics,” said Marc N. Casper, chairman, president and chief executive of Thermo Fisher. “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. For shareholders, we expect the transaction to be immediately accretive and to generate significant cost and revenue synergies.”

With a global team of more than 75,000 delivering a combination of innovative technologies, purchasing convenience and pharmaceutical services through its industry-leading brands, Thermo Fisher is the world leader in serving science, with annual revenue exceeding $25bn. Following the close of the transaction, the company expects to realise total synergies of $200m by year three, consisting of $150m of cost synergies and $50m of adjusted operating income from revenue synergies.

“Our vision at Qiagen has always been to make improvements in life possible with our differentiated Sample to Insight molecular testing solutions,” said Thierry Bernard, interim chief executive of Qiagen. “This strategic step with Thermo Fisher will enable us to enter a promising new era and will give our employees the opportunity to have an even greater impact.”

A leading provider of life science and molecular diagnostic solutions, Netherlands-based Qiagen employs approximately 5100 people at 35 locations in more than 25 countries. “The combination is designed to deliver significant cash value to our shareholders, while enabling us to accelerate the expansion of our solutions to provide customers worldwide with breakthroughs that advance our knowledge about the science of life and improve health outcomes,” added Mr Bernard.

Serving as financial advisers to Thermo Fisher are J.P. Morgan Securities LLC and Morgan Stanley & Co. LLC. Wachtell, Lipton, Rosen & Katz is serving as legal counsel. For Qiagen, Goldman Sachs International is serving as lead financial adviser and Barclays Bank PLC is serving as financial adviser. De Brauw Blackstone Westbroek NV, Linklaters LLP and Mintz, Levin, Cohn, Ferris, Glovsky and Popeo P.C. are serving as legal counsel.

The transaction, which is expected to be completed in the first half of 2021, is subject to the satisfaction of customary closing conditions, including the receipt of applicable regulatory approvals, and completion of the tender offer.

Mr Casper concluded: “We look forward to welcoming Qiagen’s employees to Thermo Fisher and are excited about the new opportunities we’ll have to advance precision medicine through new molecular diagnostics and improved life sciences workflows.”

Fraser Tennant