Thermo Fisher Scientific has reached a deal to buy genetic analysis expert Affymetrix for $1.3 billion.
The $14.00-per-share purchase price is about 50% above Affymetrix’s share price after the stock market closed on Jan. 8, the day the deal was announced. But it’s much less than the more than $150.00 for which Affymetrix shares briefly traded in early 2000 during the heyday of genomics technology development.
Affymetrix, based in Santa Clara, Calif., has 1,100 employees and annual sales of about $350 million. Thermo Fisher has sales of about $17 billion.
Although not as large as Thermo Fisher’s $13.6 billion acquisition of Life Technologies in 2014, the Affymetrix purchase helps cement the firm’s role as a supplier of equipment and consumables to the life sciences research and diagnostics communities.
The purchase will “create new market opportunities for us in genetic analysis,” says Thermo Fisher CEO Marc N. Casper, and “significantly expand our offering in the fast-growing flow cytometry market.”
Thermo Fisher’s distribution network will increase availability of Affymetrix technologies to customers in markets such as single-cell biology, reproductive health, and agricultural biotechnology, notes Affymetrix CEO Frank Witney.
“While the deal appears expensive, the synergies are many,” Dan Leonard of Leerink Partners told clients in a research note. He suggests that shares of other small to mid-sized toolmakers could strengthen “as investors ponder who’s next.”
Interestingly, the deal is Witney’s second with Thermo Fisher. In 2011, as CEO of Dionex, he sold the liquid and ion chromatography specialist to Thermo Fisher in a $2.1 billion transaction.