@ Patheon Agrees to $5.2 Billion Acquisition by Thermo Fisher Scientific | SEBIO

Patheon Agrees to $5.2 Billion Acquisition by Thermo Fisher Scientific

Posted by on May 16, 2017

DURHAM, N.C. – Patheon N.V., a global provider of pharmaceutical development and manufacturing services that has a large production facility in Greenville, will be acquired by Thermo Fisher Scientific in a deal worth about $5.2 billion.

The board of directors of the two publicly traded companies approved the acquisition in which Thermo Fisher will acquire all of the issued and outstanding stock shares of Patheon for $35 per share in cash. The transaction represents a purchase price of about $7.2 billion before the assumption of about $2 billion in net debt by Thermo Fisher.

“Over the past several years, we have increased our capabilities to become a leading CDMO (contract development and manufacturing organization) provider in a highly fragmented market,” Patheon CEO James C. Mullen said in a news release. “We are confident that our combined offerings and Thermo Fisher’s proven track record of disciplined M&A (mergers and acquisitions) and successful integrations will take our business to the next level.”

Patheon has about 9,100 employees and contractors globally, including about 1,900 people in North Carolina at its headquarters in Durham and its manufacturing sites in Greenville and High Point.

No decisions have been made about any potential workforce adjustments following the company’s acquisition, said Tyler Gronbach, Patheon’s vice president of communications and investor relations

This month it completed a $26 million expansion project at its multi-purpose drug manufacturing and packaging site in Greenville. The site provides both solid dose form manufacturing/packaging and sterile dose manufacturing, filling and lyophilization (freeze drying) of both biopharmaceuticals and small molecules.

“Patheon’s development and manufacturing capabilities are an excellent complement to our industry-leading offering for the biopharma market,” said Marc N. Casper, president and CEO of Thermo Fisher Scientific. “Our combined capabilities will enhance our unique value proposition for these customers, create significant value for our shareholders and further accelerate our company’s growth.”

This greatly expands Thermo Fisher’s imprint on North Carolina. The company has just over 700 employees at two operations in the Asheville area — a manufacturing site for cold-storage laboratory products and a contact center in Asheville and a warehousing facility about 10 miles north in Weaverville.

Patheon, which generated 2016 revenue of about $1.9 billion, has a market capitalization of about $3.8 billion. It raised $585 million in an initial public offering of stock in July 2016.

Patheon will become part of Thermo Fisher’s Laboratory Products and Services Segment.

The transaction, expected to be completed by the end of 2017, is subject to customary closing conditions and regulatory approvals. Thermo Fisher has obtained committed debt financing from Goldman Sachs Bank USA and Goldman Sachs Lending Partners LLC.

Thermo Fisher said the acquisition will give it an entry into the high-growth, $40 billion CDMO market, enable it to offer complementary services to its pharmaceutical and biotech customers, and boost its earnings per share.

Thermo Fisher, headquartered in Waltham, Mass., sells lab equipment, supplies and services in support of research, clinical trials and production. It has grown to have 55,000 employees worldwide and a market capitalization of more than $67 billion after more than $22 billion in acquisitions in the last five years, according to Bloomberg News.

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