Expanded license

15 May 2017 By Robert Cyran Follow @rob_cyran

The maker of scientific instruments is paying $5.2 bln to buy Patheon, which produces drugs and the chemicals used in them. Cost savings don’t come close to covering the premium. Its quarry’s industry may be ready for consolidation, but Thermo also has a lot to learn about it.

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Thermo Fisher Scientific said on May 15 that it had agreed to acquire Dutch drug-ingredients maker Patheon for approximately $5.2 billion in cash, or $35 a share, a 35 percent premium to the closing price on May 12. As part of the deal, Thermo Fisher also will assume about $2 billion of Patheon's debt.

By the third year after closing the transaction, Thermo Fisher expects to realize about $120 million of synergies, three-quarters of which would be from cost savings and the rest from an uplift in revenue resulting from combining the companies.

Goldman Sachs is advising Thermo Fisher and Morgan Stanley is advising Patheon.

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