Thermo Fisher Scientific buys drug-maker Patheon
19 May, 2017
Biotech company Thermo Fisher Scientific, one of the world’s biggest manufacturers of diagnostic and testing equipment, has agreed to buy drug-ingredients maker Patheon for $7.2bn, news wires reported. In a statement last Monday, Thermo Fisher said it will acquire all outstanding Patheon shares for $35 a piece in cash, 35% higher than where the stock closed on Friday. The deal's value includes approximately $2bn of net debt. The deal is expected to close by the end of 2017.
Patheon is a contract development and manufacturing organisation, or CDMO, which contracts with other companies to develop drugs. It was formed in March 2014 through a merger of Canadian drugmaker Patheon and the Dutch vitamin maker Royal DSM. By acquiring Patheon, Thermo Fisher aims to enter a high-growth market that helps companies deliver drugs to the market quicker and at lower costs.
“Over the past several years, we have increased our capabilities to become a leading CDMO provider in a highly fragmented market,” Patheon CEO James Mullen said in a statement. “We are confident that our combined offerings and Thermo Fisher's proven track record of disciplined M&A will take our business to the next level.”
Thermo Fisher has seen its stock rise over 21% in 2017, bringing its market value to about $67.1bn, while Shares of Patheon have fallen about 9.4% this year, valuing the company at about $3.8bn. By acquiring Patheon, Thermo Fisher would bring the ability to make not just any medicines, but the more complex and harder to produce type grown out of living cells.