The world's largest scientific instruments maker is shelling out $5.2 billion to acquire the Dutch drug ingredient maker. Fred Katayama reports.
Thermo Fisher Scientific is buying the Dutch drug ingredient maker Patheon for $5.2 billion. The world's largest scientific instruments maker will also assume $2 billion of debt. Thermo Fisher supplies the biopharmaceutical industry with research, clinical trial and production services. Analysts say getting Patheon allows it to expand into drug manufacturing. This comes just as drugmakers try to cut costs and reduce clinical trial times. This acquisition is the latest in a wave of consolidation hitting the contract research sector. Evercore ISI analyst Ross Muken said, "We are quite favorable on the strategic merits of the transaction. The asset has unique leverage to the high growth pharma bio-processing end market, which Thermo already services on the product side." Patheon's shares rocketed more than 30 percent higher at the market open. Thermo Fisher's shares rallied, too. The companies expect to close the deal by year's end. Thermo Fisher says the deal will immediately add to its earnings in the first full year after the close.