- Leading Electron Microscopy Platform
Complements Mass Spectrometry Leadership to Accelerate Advancements
in Structural Biology
- Creates New Opportunities to Expand
Presence in Attractive Materials Science Market
- Proprietary, Global Services Business
Generates High-Margin, Recurring Revenue Stream
- Delivers Attractive Financial Benefits;
Expected to be Immediately Accretive to Adjusted Earnings Per Share
(EPS)
Thermo Fisher Scientific Inc. (NYSE:TMO), the world leader in
serving science, and FEI Company (NASDAQ:FEIC), the leader in
high-performance electron microscopy, today announced that their
boards of directors have unanimously approved Thermo Fisher’s
acquisition of FEI for $107.50 per share in cash. The transaction
represents a purchase price of approximately $4.2 billion.
FEI designs, manufactures and supports high-performance electron
microscopy workflows that provide images and information at micro-,
nano- and picometer scales. Through its industry-leading offering,
FEI enables customers across life sciences and materials science
markets to make breakthrough discoveries and increase productivity.
Based in Hillsboro, Oregon, FEI has more than 3,000 employees
worldwide and maintains R&D, sales and manufacturing operations
primarily in Europe and the U.S. The business, which had 2015
revenues of $930 million, will become part of Thermo Fisher’s
Analytical Instruments Segment.
“The addition of FEI’s leading electron microscopy platform is
an outstanding strategic fit with our company and will create
significant value for our customers and our shareholders,” said
Marc N. Casper, president and chief executive officer of Thermo
Fisher Scientific. “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. As the unrivaled leader in life
sciences, 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. Finally, the transaction will be
immediately accretive to our earnings and will create value for our
shareholders through cost and revenue synergies.”
Don Kania, president and chief executive officer of FEI, said,
“We are pleased to reach this agreement with Thermo Fisher, which
offers a number of important benefits to FEI shareholders,
customers and employees. Our shareholders will see substantial and
immediate value through the terms of this transaction. Our
customers will benefit from the shared commitment Thermo Fisher and
FEI have to innovation and customer service. And our employees will
see new opportunities as our development and market expansion plans
accelerate by being part of Thermo Fisher, a large and growing
company. Fundamentally, this transaction bolsters our already
strong position in the marketplace and allows us to play an
increasing role in enabling our customers to accelerate
breakthrough discoveries, increase productivity and provide
solutions to global challenges.”
Casper concluded, “We are very excited to welcome our new
colleagues from FEI to the Thermo Fisher team and look forward to
realizing the significant benefits of the transaction for all our
key stakeholders. FEI’s commitment to R&D, strong IP
foundation, and excellent services and software offerings are a
great fit with our Analytical Instruments business and will create
exciting new opportunities to drive growth.”
Benefits of the Transaction
- Leading Electron Microscopy Platform
Complements Mass Spectrometry Leadership to Accelerate Advancements
in Structural Biology. FEI’s high-end electron microscopes (EM)
are complementary to Thermo Fisher’s mass spectrometry systems used
for protein identification and characterization. FEI’s Cryo-EM
technology, for example, is a disruptive technique used
increasingly for the analysis of proteins in structural biology.
With its global scale and commercial reach, Thermo Fisher also has
the opportunity to drive the adoption of FEI’s technologies among
its life sciences customers, particularly in biopharma.
- Creates New Opportunities to Expand
Presence in Attractive Materials Science Market. FEI brings
unique imaging technologies that improve quality and productivity,
and expand Thermo Fisher’s capabilities in materials science. Its
3D nano-characterization and nano-prototyping technologies, for
example, are critical tools that support the growing trend toward
development of devices that are increasingly smaller and more
complex to manufacture. Thermo Fisher will benefit from FEI’s
strong presence in the semiconductor market, creating a new growth
opportunity within this customer set.
- Proprietary, Global Services
Business Generates High-Margin, Recurring Revenue Stream. FEI
brings an industry-leading services business supported by more than
800 employees in over 20 countries, enabling customers to achieve
maximum productivity from their instruments. The services business
drives high-margin, recurring revenues that represent approximately
25% of total FEI sales, and will contribute to Thermo Fisher’s
growing services capabilities.
- Delivers Attractive Financial
Benefits. The transaction is expected to be 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
$80 million by year three following the close, consisting of
approximately $55 million of cost synergies and approximately $25
million of adjusted operating income1 benefit from revenue-related
synergies.
Approvals and Close
The transaction, which is expected to be completed by early
2017, is subject to the approval of FEI shareholders and the
satisfaction of customary closing conditions, including applicable
regulatory approvals. Thermo Fisher intends to use proceeds from
committed debt financing and cash on hand to fund the
transaction.
Advisors
JP Morgan is acting as financial advisor to Thermo Fisher, and
Wachtell, Lipton, Rosen & Katz is serving as legal counsel.
Goldman, Sachs & Co. is acting as financial advisor to FEI, and
Wilson Sonsini Goodrich & Rosati is serving as legal
counsel.
Use of Non-GAAP Financial Measures
In addition to the financial measures prepared in accordance
with generally accepted accounting principles (GAAP), we use
certain non-GAAP financial measures, including adjusted EPS and
adjusted operating income, which exclude certain
acquisition-related costs, including charges for the sale of
inventories revalued at the date of acquisition and significant
transaction costs; restructuring and other costs/income; and
amortization of acquisition-related intangible assets. Adjusted EPS
also excludes certain other gains and losses that are either
isolated or cannot be expected to occur again with any regularity
or predictability, tax provisions/benefits related to the previous
items, benefits from tax credit carryforwards, the impact of
significant tax audits or events and the results of discontinued
operations. We exclude the above items because they are outside of
our normal operations and/or, in certain cases, are difficult to
forecast accurately for future periods. We believe that the use of
non-GAAP measures helps investors to gain a better understanding of
our core operating results and future prospects, consistent with
how management measures and forecasts the company’s performance,
especially when comparing such results to previous periods or
forecasts.
Conference Call and Webcast
Thermo Fisher will host a conference call and webcast at 8:30
a.m. ET today to provide more information on this announcement. The
webcast and accompanying slides can be accessed in the Investors
section of www.thermofisher.com. An audio archive of the call will
be available in that section of the website until June 27,
2016.
Conference Call Dial-in:
Domestic: (866) 610-1072
International: (973) 935-2840
Conference ID: 21001545
Replay Dial-in:
Dial-In: (800) 585-8367 or (404)
537-3406
Conference ID: 21001545
FEI Analyst Day Cancellation
As a result of today’s announcement, FEI is canceling its
previously announced Investor and Analyst Event scheduled for June
2, 2016, in New York, NY.
About Thermo Fisher
Thermo Fisher Scientific Inc. (NYSE:TMO) is the world leader in
serving science, with revenues of $17 billion and more than 50,000
employees in 50 countries. Our mission is to enable our customers
to make the world healthier, cleaner and safer. We help our
customers accelerate life sciences research, solve complex
analytical challenges, improve patient diagnostics and increase
laboratory productivity. Through our premier brands – Thermo
Scientific, Applied Biosystems, Invitrogen, Fisher Scientific and
Unity Lab Services – we offer an unmatched combination of
innovative technologies, purchasing convenience and comprehensive
support. For more information, please visit
www.thermofisher.com.
About FEI
FEI Company (Nasdaq:FEIC) designs, manufactures and supports a
broad range of high-performance microscopy workflow solutions that
provide images and answers at the micro-, nano- and picometer
scales. Its innovation and leadership enable customers in industry
and science to increase productivity and make breakthrough
discoveries. Headquartered in Hillsboro, Ore., USA, FEI has over
3,000 employees and sales and service operations in more than 50
countries around the world. More information can be found at:
www.fei.com.
Safe Harbor Statement
The following constitutes a “Safe Harbor” statement under the
Private Securities Litigation Reform Act of 1995: This
communication contains forward-looking statements that involve a
number of risks and uncertainties. Important factors that could
cause actual results to differ materially from those indicated by
forward-looking statements include risks and uncertainties relating
to: the need to develop new products and adapt to significant
technological change; implementation of strategies for improving
growth; general economic conditions and related uncertainties;
dependence on customers’ capital spending policies and government
funding policies; the effect of exchange rate fluctuations on
international operations; the effect of healthcare reform
legislation; use and protection of intellectual property; the
effect of changes in governmental regulations; and the effect of
laws and regulations governing government contracts, as well as the
possibility that expected benefits related to the proposed FEI
transaction may not materialize as expected; the FEI transaction
not being timely completed, if completed at all; prior to the
completion of the transaction, FEI’s business experiencing
disruptions due to transaction-related uncertainty or other factors
making it more difficult to maintain relationships with employees,
customers, licensees, other business partners or governmental
entities, difficulty retaining key employees, and the parties being
unable to successfully implement integration strategies or to
achieve expected synergies and operating efficiencies within the
expected time-frames or at all. Additional important factors that
could cause actual results to differ materially from those
indicated by such forward-looking statements are set forth in
Thermo Fisher’s Annual Report on Form 10-K for the year ended
December 31, 2015 and its subsequent Quarterly Reports on Form
10-Q, including its Quarterly Report on Form 10-Q for the quarter
ended April 2, 2016, each of which is on file with the Securities
and Exchange Commission (the “SEC”) and available in the
“Investors” section of Thermo Fisher’s website under the heading
“SEC Filings,” and in other documents Thermo Fisher files with the
SEC, and in FEI’s Annual Report on Form 10-K for the year ended
December 31, 2015 and its subsequent Quarterly Reports on Form
10-Q, including its Quarterly Report on Form 10-Q for the quarter
ended April 3, 2016, each of which is on file with the SEC and
available in the investor relations section of FEI’s website,
investor.fei.com, under the heading “SEC Filings,” and in other
documents FEI files with the SEC. While Thermo Fisher or FEI may
elect to update forward-looking statements at some point in the
future, Thermo Fisher and FEI specifically disclaim any obligation
to do so, even if estimates change and, therefore, you should not
rely on these forward-looking statements as representing either
Thermo Fisher’s or FEI’s views as of any date subsequent to
today.
Additional Information
In connection with the transaction, FEI intends to file relevant
materials with the SEC, including a preliminary proxy statement on
Schedule 14A. Promptly after filing its definitive proxy statement
with the SEC, FEI will mail the definitive proxy statement and a
proxy card to each stockholder entitled to vote at the special
meeting relating to the transaction. INVESTORS AND SECURITY HOLDERS
OF FEI ARE URGED TO READ THESE MATERIALS (INCLUDING ANY AMENDMENTS
OR SUPPLEMENTS THERETO) AND ANY OTHER RELEVANT DOCUMENTS IN
CONNECTION WITH THE TRANSACTION THAT FEI WILL FILE WITH THE SEC
WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT FEI AND THE TRANSACTION. The definitive proxy
statement, the preliminary proxy statement and other relevant
materials in connection with the transaction (when they become
available), and any other documents filed by FEI with the SEC, may
be obtained free of charge at the SEC’s website
(http://www.sec.gov) or through the investor relations section of
FEI’s website (http://investor.fei.com).
Participants in the Solicitation
FEI and its directors, executive officers and other members of
its management and employees as well as Thermo Fisher and its
directors and executive officers may be deemed to be participants
in the solicitation of proxies from FEI’s stockholders with respect
to the merger. Information about FEI’s directors and executive
officers and their ownership of FEI’s common stock is set forth in
the proxy statement for FEI’s 2016 Annual Meeting of Stockholders
filed with the SEC on March 28, 2016. Information about Thermo
Fisher’s directors and executive officers is set forth in the proxy
statement for Thermo Fisher’s 2016 Annual Meeting of Stockholders
filed with the SEC on April 5, 2016. Stockholders may obtain
additional information regarding the direct and indirect interests
of the participants in the solicitation of proxies in connection
with the merger, including the interests of FEI’s directors and
executive officers in the merger, which may be different than those
of FEI’s stockholders generally, by reading the proxy statement and
other relevant documents regarding the merger when they become
available, which will be filed with the SEC.
1 Adjusted earnings per share and adjusted operating income are
non-GAAP measures that exclude certain items detailed later in this
press release under the heading “Use of Non-GAAP Financial
Measures.”
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160527005116/en/
For Media:Thermo FisherKaren Kirkwood,
781-622-1306karen.kirkwood@thermofisher.comwww.thermofisher.comorFor
Investors:Ken Apicerno,
781-622-1294ken.apicerno@thermofisher.comorFEI CompanyJason Willey,
503-726-2533jason.willey@fei.comwww.fei.com
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