Thermo Electron Corporation and Fisher Scientific International Inc. have announced that the boards of directors of both companies have unanimously approved a definitive agreement to combine the two companies in a tax-free, stock-for-stock exchange.
The transforming merger will create the leading provider of laboratory products and services in the life, laboratory and health sciences industry.
The new company will be named Thermo Fisher Scientific Inc. and is expected to have 2007 revenues of $9 billion.
By combining both Companies’ capabilities, the new company will be uniquely positioned to provide integrated, end-to-end technical solutions.
Thermo Fisher Scientific will have an global sales and service organization with nearly 7,500 professionals serving its customers worldwide.
Under the terms of the agreement, Fisher shareholders will receive 2.00 shares of Thermo common stock for each share of Fisher common stock they own.
Based on Thermo’s closing price of $39.45 per share on May 5, 2006, this represents a value of $78.90 per Fisher share, or an aggregate equity value of $10.6 billion, not including net debt of $2.2 billion.
Upon completion of the transaction, Thermo’s shareholders would own approximately 39 percent of the combined company, and Fisher shareholders would own approximately 61 percent.
The transaction will be treated as a reverse merger with Thermo as the acquirer.
Marijn E. Dekkers, president and chief executive officer of Thermo, will become president and chief executive officer of the combined company, and Paul M. Meister, vice chairman of the board for Fisher, will become chairman of the board of the combined company.
Following the close of the transaction, Paul M. Montrone, chairman and chief executive officer of Fisher, will be stepping aside in support of the new management team. He will remain an adviser to the company.
Jim P. Manzi, chairman of the board of Thermo, will serve on the board of directors of the combined company.
Thermo Fisher Scientific’s board of directors will be comprised of eight members, with five nominated by Thermo and three nominated by Fisher.
"This combination brings together two well-respected industry leaders in the life, laboratory and health sciences marketplace to create a company that has the product breadth, global reach and operational expertise to drive significant value for shareholders, customers and employees," said Dekkers.
"Both Thermo and Fisher have strong track records of acquisition success and margin expansion."
"By combining our companies’ complementary world-class product and service offerings with Fisher’s unparalleled customer access, we expect to accelerate growth by further penetrating our vast customer base."
"Our customers will benefit from a partnership that can provide integrated, end-to-end application solutions to reduce their costs and increase efficiency."
"Our companies and employees share a strong commitment to our customers, and I am pleased to bring the talented employees of these two great companies together."
"For more than 100 years, Fisher has played an important role in aiding scientific discovery," said Montrone.
"Our focus on supplying innovative product and service solutions has enabled our 350,000 customers to concentrate on what they do best - improving health and extending life."
"Thermo has an equally solid record, and the combined company will be well-positioned to deliver accelerated earnings growth for shareholders."
Meister added, "This is a great transaction that provides Fisher shareholders with enhanced value both today and over the long-term."
"The upside potential we see as a result of our combination is compelling. By leveraging the operating expertise at both companies, we anticipate realizing the strategic and financial benefits of this transaction quickly and efficiently."