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Thermo Fisher Scientific to Acquire Olink for $3.1Billion

Acquisition Overview

American medical equipment maker Thermo Fisher Scientific will acquire Swedish proteomics solutions provider Olink for USD $3.1 billion in a move that will allow Thermo Fisher to expand its life sciences platforms.

Deal Structure

The deal will cost Thermo Fisher $3.1 billion, including net cash of approximately $143 million. Thermo Fisher will pay $26.00 per common share, which represents a premium of 74% on the closing price of Olink’s NASDAQ shares on October 16, 2023. The announcement saw Olink’s US shares rise by around 66.5% in early trading on October 17, 2023. Thermo Fisher’s shares fell by over 1%.

The deal is expected to be dilutive to adjusted EPS by $0.17 in the first year. Thermo Fisher expects to realise $125 million of adjusted operating income, attributable to revenue and cost synergies, in the first five years after closing.

J.P. Morgan Securities LLC is serving as lead financial advisor to Olink, with Goldman Sachs Bank Europe SE, Sweden Bankfilial also serving as financial advisors.

Thermo Fisher Scientific Overview

Thermo Fisher Scientific is a medical equipment and solutions supplier headquartered in Waltham, Massachusetts, U.S. It is the product of the 2006 merger of Thermo Electron and Fisher Scientific and employs a workforce of approximately 130,000.

Market Cap (3rd November, 2023): 175.51 billion USD

Enterprise Value: 204.64 billion USD

LTM Revenue (December 31, 2022): $44.92 billion

Industry Insight

Amongst increasing competition in the pharma and life sciences industry, innovation has become key to stand-out and win customers. Along this line has come a rise in the use of artificial intelligence in research and development to streamline processes, and this offers a potential area of high-growth in the future. Increasing the need to innovate, supply chain and logistics issues due to the economic shut-down of China has led to slowing demand for some services.

Strategic Rationale

Due to decreasing demand for its life sciences offerings, Thermo Fisher is seeking to expand into the high-growth proteomics field. Olink’s experience in proteomics, expected growth opportunities and significant synergies make it an ideal candidate for acquisition. From the perspective of Olink’s shareholders, the high premium paid by Thermo Fisher presents an enticing opportunity to profit from the company’s positive expected outlook and the growth of the proteomics market.

Long-Term Prospects

The deal holds the long-term in mind as the central period over which its benefits are gauged. Though the deal will be dilutive short-term, it provides strong long-term growth prospects and allows Thermo Fisher to expand further into a high-growth market. Olink will be able to make use of Thermo Fisher’s outsized resources and presence in other markets and geographies to grow and strengthen its own services. I therefore believe this deal will be beneficial to the growth strategy of Thermo Fisher Scientific in the future.

Written by Chloe O’Connor (Balliol College)

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