Thermo Fisher Scientific Inc. has signed definitive
agreements to sell its Athena Diagnostics and Lancaster Laboratories businesses
for a total of $940 million in cash. The company reached an agreement to sell
Athena Diagnostics to Quest Diagnostics Incorporated for $740 million. Athena
Diagnostics, based in Worcester,
Mass., is a leading reference
laboratory that provides comprehensive diagnostic testing for neurological and
other diseases, with an emphasis on gene-based tests. The business had
approximately $110 million in revenues for full year 2010, has approximately
300 employees and is part of the company’s specialty diagnostics business within
its Analytical Technologies Segment. Quest Diagnostics, based in Madison, N.J.,
is the world’s leading provider of diagnostic testing, information and
services. The company offers the broadest access to diagnostic testing services
through its network of laboratories and patient service centers, and provides
interpretive consultation through its extensive medical and scientific staff.
Quest Diagnostics reported 2010 revenues of $7.4 billion.
The company also reached an agreement to sell Lancaster
Laboratories to Eurofins Scientific SE for $200 million, subject to a
post-closing adjustment. Lancaster Laboratories, based in Lancaster, Pa.,
is a contract-testing laboratory that provides comprehensive analytical services
for pharmaceutical, biopharmaceutical and environmental sciences customers. The
business had approximately $115 million in revenues for full year 2010, has
approximately 1,100 employees at its operations in the U.S. and Ireland, and is part of the
company’s biopharma services business within its Laboratory Products and Services
Segment. Eurofins Scientific, based in Brussels,
Belgium, is a
leader in providing laboratory services for the pharmaceutical, bioanalytical,
environmental and food processing industries. Eurofins reported revenues of
approximately $900 million in 2010 and has 8,000 employees located in 30
countries throughout Europe, the U.S.,
Asia and South America.
“Athena and Lancaster have performed very well within
our company and we believe that these strategic buyers will offer them even
greater opportunities for growth in the long term,” said Marc N. Casper, president
and chief executive officer of Thermo Fisher Scientific.
“The transactions position both businesses in companies
that are closely aligned with the unique contract laboratory services they provide
and, at the same, will generate significant proceeds that we can redeploy to
create shareholder value.” Thermo Fisher expects to close these
transactions in the second quarter of 2011, subject to customary closing
conditions and applicable regulatory approvals. Financial results for both businesses,
including historical comparative periods, will be reported in discontinued
operations beginning in the first quarter of 2011.
Thermo Fisher’s board of directors has also authorized a new
$750 million share repurchase program, which expires February 22, 2012. As of
today, the company has approximately $385 million remaining under its existing
share repurchase authorization, which expires September 8, 2011.
In 2010, Athena and Lancaster, combined, contributed $0.11
to Thermo Fisher’s full year adjusted earnings per share (EPS), or $0.09 on a GAAP
basis. The company’s 2011 full year guidance, provided on February 2, 2011, did
not include the impact of these divestitures or the benefit of its pending
acquisition of Dionex Corporation.
Assuming Dionex closes early in the second quarter, the net
effect of the two divestitures, the addition of Dionex and the benefit of the new
share repurchase program would lead to an increase of approximately $0.05 to
2011 adjusted EPS. Thermo Fisher will update its 2011 financial guidance early
in the second quarter.