The transaction represents a purchase price of approximately $7.2bn
Floor governor Rudy Mass (L) closes the price to begin trading of Patheon during the company's IPO on the floor of the New York Stock Exchange, 2016. REUTERS/Brendan McDermid
The Boards of Directors for Thermo Fisher Scientific and Patheon, global provider of high-quality drug development and delivery solutions, have approved Thermo Fisher's acquisition of Patheon. The latter will become part of Thermo Fisher's Laboratory Products and Services Segment.
Thermo Fisher is a big name in the CDMO market, while Patheon has an extensive network of state-of-the-art facilities, primarily in North America and Europe, with approximately 9,000 professionals worldwide. The company generated revenue of approximately $1.9bn in 2016.
The transaction represents a purchase price of approximately $7.2bn, which includes the assumption of approximately $2.0bn of net debt. Currently, it is subject to the satisfaction of customary closing conditions.
Thermo Fisher expects to realise total synergies of approximately $120m by year three following the close.
Patheon serves a large, fragmented market growing in the mid-single to high-single digits, which is fueled by strong demand for outsourcing services that allow customers to simplify their supply-chain networks.
On the other side, Thermo Fisher has become a trusted outsourcing partner by providing clinical trials logistics services during the past decade.
The combined company's extensive relationships in the biopharma industry will enable significant cross-selling opportunities; for example, access to biologics development and manufacturing capabilities, as well as bioproduction technologies.
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.