Thermo Fisher to buy Qiagen in $11.5bn deal

US laboratory equipment maker Thermo Fisher Scientific has agreed to buy Qiagen in an $11.5bn deal.

Under the terms of the transaction, Thermo Fisher will pay €39 per share in cash, which is a premium of about 23% to the closing Qiagen share price on Monday. Dutch Qiagen makes tests for diseases such as cancer.

The transaction is expected to be immediately accretive to Thermo Fisher’s adjusted earnings per share after close. Thermo Fisher expects to realise total synergies of $200m by year three following the close, consisting of $150m of cost synergies and $50m of adjusted operating income benefit from revenue synergies.

The deal is expected to complete in the first half of next year.

Thermo Fisher chairman, president and chief executive Marc N. Casper, said: "We are excited to bring together our complementary offerings to advance our customers’ important work, from discovery to diagnostics.

"This acquisition provides us with the opportunity to leverage our industry-leading capabilities and R&D expertise to accelerate innovation and address emerging healthcare needs. For shareholders, we expect the transaction to be immediately accretive and to generate significant cost and revenue synergies."

Olivetree Financial said: "€39 would have been seen as a disappointing outcome when the company was undertaking its strategic review in Q4 2019, although we were always most comfortable modelling 23xEV/EBITDA, which equates to circa €40 per share. The stock traded at 39 itself in late November, so the market got heady with hope of a competitive situation, we now know that circa 23x does indeed hold as a roughly appropriate takeout multiple.

"It is hard to argue that fundamentally €39 is the wrong price, but the market will hope for further third party interest from here. Illumina was particularly widely discussed - it is likely here that the market will focus its hopes for a competing offer. With a projected closing date of H1 2021, TMO’s deal clearly comes with some reasonably complicated anti-trust, the upside of this should be that third parties should be able to compete with such a proposal. Whether they have already had the chance to behind the scenes remains to be seen and will be the main line of questioning this morning."