Thermo Fisher to Buy Patheon for About $5.2B

IndustriesReuters

Thermo Fisher Scientific, the world's largest maker of scientific instruments, said on Monday it would buy Dutch drug ingredients maker Patheon for about $5.2 billion in cash.

Thermo Fisher's offer of $35 per share represents a premium of about 35 percent to Patheon's Friday close. Patheon shares were up about 33 percent in premarket trading.

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The deal represents a purchase price of about $7.2 billion, which includes the assumption of about $2.0 billion of net debt, the companies said in a statement.

Thermo Fisher, which already supplies the biopharmaceutical industry with research, clinical trials and production services, will now have the drug ingredients maker's abilities as drugmakers look to cut costs and reduce clinical trial times.

The contract research space is in the midst of a wave of consolidation with INC Research Holdings last week saying it would merge with inVentiv Health in a $4.6 billion deal to help it win contracts with large pharma companies.

The transaction, which is expected to be completed by the end of 2017, will immediately add to Thermo Fisher's adjusted profit by 30 cents in the first full year after close.

Goldman Sachs & Co is acting as financial adviser to Thermo Fisher, and Wachtell, Lipton, Rosen & Katz is serving as legal counsel.

Morgan Stanley & Co is Patheon's financial adviser, and Skadden, Arps, Slate, Meagher & Flom LLP is its legal counsel.

(Reporting by Ankur Banerjee in Bengaluru; Editing by Shounak Dasgupta and Martina D'Couto)