Thermo Fisher To Sell Cell Culture Business, Other Assets To GE For $1.06 Bln

(RTTNews) - Laboratory equipment maker Thermo Fisher Scientific, Inc. (TMO) said Monday that it has agreed to sell its cell culture, gene modulation and magnetic beads businesses to diversified conglomerate General Electric Co. (GE) for about $1.06 billion.

The sale of these businesses are part of Thermo Fisher's efforts to accelerate approval by the European Commission of the company's pending acquisition of its smaller rival Life Technologies Corp. (LIFE). The divested businesses will become part of GE Healthcare's Life Sciences division.

The combined revenue of the three businesses, which are primarily part of Thermo Fisher's analytical technologies segment, is expected to be about $250 million in 2013. In October 2013, Thermo Fisher said that revenues at the analytical technologies segment rose 1 percent from the year-ago period to $997 million.

Thermo Fisher said that based on its talks with the U.S. Federal Trade Commission or FTC, it does not expect to make any additional divestures in order to receive U.S. approval. Thermo Fisher and GE expect the transaction to close in the first part of 2014.

In a separate statement, GE said that the acquisition of the businesses from Thermo Fisher will allow it to expand its offering of technologies for the discovery and manufacture of innovative new medicines, vaccines and diagnostics in its $4 billion Life Sciences business.

GE noted that the acquisitions will extend its bioprocessing manufacturing footprint in Asia, the Americas and Europe. Further, the company said that the acquisitions are consistent with its strategy to invest in high-technology, innovative businesses that deliver strong top-line growth and expanded margins.

According to GE, Thermo Fisher's HyClone cell culture media and sera products are highly complementary to GE Healthcare's established technologies for cell biology research and biopharmaceutical manufacturing, enabling the company to offer its customers a substantially wider range of technologies and services.

Cell culture plays a key role in manufacturing medicines to treat diseases such as cancer and rheumatoid arthritis, as well as a new generation of vaccines.

In mid-April 2013, Waltham, Massachusetts-based Thermo Fisher said it agreed to acquire Carlsbad, California-based Life Technologies for $76.00 per share in an all-cash deal valued at $13.6 billion. Additionally, Thermo Fisher said it will take up assumed debt of about $2.2 billion.

Life Technologies provides laboratory supplies including instruments, reagents, and antibodies.

The company provides reliable and easy-to-use solutions spanning the biological spectrum with more than 50,000 products for translational research, molecular medicine and diagnostics, stem cell-based therapies, forensics, food safety and animal health. The company generated sales of $3.8 billion in 2012.

Life Technologies recently expanded into advanced genetic-sequencing equipment, lowering the cost of DNA analysis significantly.

For Thermo Fisher, Life Technologies' genetics segment is expected to offer growth potential, while its laboratory-supply business would provide a steady cash flow that could enable the company to clear its new debt raised for the leveraged buyout. The deal would also enable Thermo Fisher to cut down on sales and administrative costs.

TMO closed Friday's trading at $110.05, up $0.42 or 0.38 percent on a volume of 1.49 million shares.

GE closed Friday's trading at $27.48. In Monday's pre-market trades, the stock is adding $0.08 or 0.29 percent to $27.56.