US-based Thermo Fisher Scientific (NYSE:TMO) has won exclusive negotiating rights for the takeover of genetic testing equipment maker Life Technologies (NASDAQ:LIFE) with a bid of about $75 a share, or around $13 billion in total, newswires reported on Monday, April 15.
If successful, the acquisition will enable Thermo to enter the field of genetic sequencing – the branch of science looking to find the genetic factors behind diseases to better adjust treatments to patients, Reuters pointed out.
Analysts have said that a combination of Thermo Fisher, which produces scientific equipment, and Life Technologies would lead to the creation of a market leader in the life sciences sector with revenues of up to $20 billion (₤13 billion).
According to inside sources cited by Reuters, the board of US-based Life Technologies met on Saturday to review three separate takeover offers and chose Thermo Fisher’s $75-per-share offer over undisclosed bids from Sigma-Aldrich, a maker of chemicals for research laboratories, and a private equity consortium consisting on Blackstone Group LP, Carlyle Group LP, KKR & Co LP and Temasek Holdings. Unidentified inside sources quoted by Bloomberg said that the consortium had initially proposed to pay some $65 a share and was waiting to see how the other bidders fared before increasing its offer but wasn’t prepared to pay $70 a share or more. Sources also said that US-based Sigma-Aldrich Corp. had also expressed interest in Life and if there is no deal with Thermo Fisher, Sigma-Aldrich may enter discussions to buy Life.
Thermo’s offer values Life Technologies at about $13 billion (₤8.5 billion), which would make the acquisition one of the biggest this year. A deal is expected to come as soon as Monday, though negotiations could still break down as details are being finalised, Reuters said.
Shares of Life Technologies rose by 1.8 percent to $68 on Friday, giving the company a market capitalisation of $11.6 billion (₤7.6 billion). The stock has climbed by 25 percent since mid-January, when the company disclosed it was studying acquisition offers. A deal at $75 per share would represent a premium of 36 percent on Life Technologies’ closing share price on January 17, the day before it announced it had hired Deutsche Bank and Moelis & Co to assist in a strategic review.
Thermo Fisher is a large lab equipment maker, with annual sales of about $12.5 billion (₤8.2 billion) and a market capitalisation of $28 billion (₤18.3 billion). Life Technologies was created through a series of deals, including the merger of Applied Biosystems and Invitrogen about five years ago. The company, which had revenue of $3.8 billion (₤2.5 billion) in 2012, makes more than 50,000 products, including equipment used to develop drugs, improve food and water safety and in forensics. It also recently expanded into advanced genetic-sequencing machines.
**Life Technologies Acquires KDR Biotech**
Life Technologies announced on Thursday, April 12, that it has purchased KDR Biotech, a Korean company that has been distributing its products since 1982, for an undisclosed sum.
The Korean biotechnology market has high potential—showing solid growth over the past five years and with the Korean government’s Bio-vision 2016 initiative, it’s anticipated to drive further growth in biotechnology investments within the country, Life Technologies said in a statement.
!m[Life Technologies Acquires South Korea’s KDR Biotech ](/uploads/story/1883/thumbs/pic1_inline.png)
“The acquisition of KDR Biotech is in line with Life’s Asia-Pacific Japan strategy to further develop customer relationships, improve the customer experience and increase revenue in the fast-growing South Korean biotechnology market, in addition to Life’s overall strategy of expanding our footprint into strong growth and emerging markets,” said Mark Smedley, president of Life Technologies, Asia-Pacific Japan region. “KDR Biotech will help us build a strong, leading brand in South Korea to propel us forward into sustainable growth.”
**Life Technologies’ share price was $68.00 as of 15.04.2013, 09.55 GMT.**
**Thermo Fisher’s share price was $79.59 as of 15.04.2013, 09.55 GMT.**