Thermo Fisher Scientific Completed the FEI Acquisition

On September 19, 2016, Thermo Fisher Scientific (TMO) announced the strategic acquisition of FEI Company (FEIC) for $4.2 billion, or for $107.50 per share in cash. After the acquisition, FEI Company will be a part of Thermo Fisher Scientific’s Analytical Instruments segment and help accelerate that segment, which is growing at a slow pace.

The Cryo-EM technology, nano-prototyping imaging, and 3D nano-characterization technologies of FEI are expected to enhance Thermo Fisher Scientific’s portfolio offerings in the mass spectrometry and material sciences space. The acquisition will also help strengthen Thermo Fisher Scientific’s life sciences business.

As we discussed in How the FEI Acquisition Will Benefit Thermo Fisher Scientific, the acquisition is expected to be immediately accretive to earnings. The acquisition is expected to yield synergies of ~$80 million by the end of the third year of the deal. The cost synergies are expected to be ~$55 million and the revenue-related synergies are expected to yield around $25 million.

According to Marc N. Casper, Thermo Fisher Scientific’s president and chief executive officer, “With FEI’s leading electron microscopy platform, we’re now in an even stronger position to help our life sciences customers accelerate advancements in structural biology. FEI’s products also create new opportunities for us to serve customers in materials science markets that increasingly rely on nanotechnologies.”

Other major Thermo Fisher Scientific’s competitors that have pursued mergers and acquisitions in the US medical device industry include Stryker (SYK), Abbott Laboratories (ABT), and Zimmer-Biomet Holdings (ZBH). The iShares Edge MSCI Min Vol USA ETF (USMV) invests approximately 0.39% of its portfolio in Thermo Fisher Scientific

Next, we’ll look at Thermo Fisher Scientific’s recent initiatives to accelerate its emerging markets growth strategy.