Thermo Fisher Scientific Ponies Up $2.1B for Dionex

Dionex’ ion and liquid chromatography systems complement Thermo Fisher’s GC systems.

Thermo Fisher Scientific is doling out $2.1 billion to take over Dionex. The deal brings two complementary chromatography portfolios together and bolsters Thermo Fisher’s presence in Asia Pacific and environmental analysis markets.

Under the terms of the agreement, Thermo Fisher will pay $118.50 per Dionex share in cash. This represents a roughly 21% premium to Dionex’s closing stock price on Friday, December 10, the last trading day prior to today’s announcement.

The transaction is not conditioned on financing and is expected to be completed in the first quarter of 2011. Thermo Fisher expects to realize total operating synergies of $60 million in the third year after closing. This includes approximately $40 million from cost-related synergies and $20 million of adjusted operating income benefit from revenue-related synergies. The deal is expected to be accretive to the company’s adjusted earnings per share by $0.13 to $0.15 in the first 12 months following the close.

The agreement combines Dionex’ ion and liquid chromatography systems and consumables with Thermo Fisher’s gas chromatography systems and consumables. “We believe the combination of Thermo Fisher and Dionex is extremely compelling from a technology, market, and financial perspective,” says Marc N. Casper, president and CEO of Thermo Fisher.

“Dionex’ strength in chromatography instruments, software, and consumables complements our leading positions in mass spectrometry and laboratory information management systems,” Casper adds. The company is based in Sunnyvale, CA, and will be integrated into Thermo Fisher’s analytical technologies segment.

Dionex has more than 1,600 employees in 21 countries, spanning six continents, including a presence in the Asia Pacific region. It currently generates more than 35% of its revenues in Asia Pacific and other emerging high-growth geographies, according to Thermo Fisher.

“The transaction, which we expect to be immediately accretive, is consistent with our strategy of accelerating growth by increasing our depth of capabilities to serve attractive end markets. Specifically, it complements our strong presence in China, where we’ve established the headquarters for our global environmental instruments business and continue to build our commercial infrastructure to meet the needs of customers in growing water-quality, consumer-safety, and life-sciences markets.”

Thermo Fisher notes that it will also benefit from Dionex’ customer base and relationships in applied markets like environmental analysis and food safety. The company expects to deliver unmatched analytical solutions for a growing range of testing needs, particularly water analysis, where growth is being driven by new regulatory requirements and increased testing in developing countries such as China.

“The acquisition of Dionex is another example of the great progress we’re making in executing on our strategy to accelerate growth,” Casper remarks. “We have invested in technology innovation, Asia expansion, and complementary acquisitions—all to strengthen our growth opportunities in attractive end markets.”

Earlier this month Thermo Fisher Scientific picked up Lomb Scientific, a company based in Australia and New Zealand. It provides laboratory chemicals, consumables, and instruments to customers in both countries as well as a growing portion of Asia and the Middle East. Thermo Fisher previously bought Biolab, another firm in Australia/New Zealand, in April 2009 for A$175 million.

Over the past year, Thermo Fisher has also acquired Massachusetts firm Ahura Scientific for $145 million, Finnish company Finnzymes, Danish company Proxeon, and Fermentas, which has operations in Canada and Lithuania, for $260 million.