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Thermo Fisher to acquire FEI

$4.2 billion electron microscopy acquisition fills a gap in Thermo Fisher’s portfolio

by Marc S. Reisch
May 27, 2016

Credit: FEI
Scanning electron microscope image of an Asian tiger mosquito larva.
800x magnification of an Asian tiger mosquito larva’s mouth parts.
Credit: FEI
Scanning electron microscope image of an Asian tiger mosquito larva.

Thermo Fisher Scientific has agreed to pay $4.2 billion in cash to buy electron microscopy expert FEI. The acquisition would fill a gap in Thermo Fisher’s broad portfolio of scientific instruments which include chromatography, mass spectrometry, and gene sequencing tools.

Thermo Fisher will be paying $107.50 in cash for each FEI share, which represents a 14% premium over FEI’s $94.58 closing price on May 26, the day before the deal was announced. Both companies’ boards of directors have already approved the deal. They expect it to close early next year pending FEI shareholder and regulatory approvals.

Marc N. Casper, Thermo Fisher’s CEO, says FEI’s electron microscopy platform, which includes scanning electron and transmission electron microscopes, is a good fit with his firm’s scientific tools. “In life sciences, there is a growing adoption of electron microscopy to study the structure of proteins,” he explains. “The technologies we gain with FEI will complement our mass spectrometry leadership.” Mass spectrometry is used for protein identification and characterization.

Don Kania, FEI’s CEO, says the transaction will allow his company “to play an increasing role in enabling our customers to accelerate breakthrough discoveries, increase productivity, and provide solutions to global challenges.”

Oregon-based FEI has 3,000 employees in the U.S. and Europe and had 2015 revenues of $930 million, including sales of services and consumables. It will become part of Thermo Fisher’s analytical instruments segment. Thermo Fisher had total sales of just under $17 billion last year.

In terms of scientific instruments alone, the transaction will join number one-ranked Thermo Fisher, with $4.2 billion in sales, with FEI, which had $484 million in sales based on C&EN’s latest survey of the top instrument firms. The deal widens the gap between Thermo Fisher and its nearest competitor, Danaher, which had $2.4 billion in instrument sales last year. Not reflected in these numbers is Thermo Fisher’s $1.6 billion purchase of gene analysis firm Affymetrix in March.

The FEI deal will also expand opportunities for Thermo Fisher in the semiconductor market, where FEI’s nano-characterization and nano-prototyping tool support development of small complex devices.

“The acquisition does increase the cyclicality of Thermo Fisher’s business, since FEI is meaningfully exposed to the semiconductor business,” points out Leerink Research analyst Dan Leonard. On the other hand, “Thermo Fisher’s presence in life sciences could accelerate FEI’s aspirations to grow its life sciences business,” he says.



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