WALTHAM, Mass. and DURHAM, N.C., May 15,
2017 /PRNewswire/ -- Thermo Fisher Scientific Inc.
(NYSE: TMO), the world leader in serving science, and Patheon N.V.
(NYSE: PTHN), a leading global provider of high-quality drug
development and delivery solutions to the pharmaceutical and
biopharma sectors, today announced that their boards of directors
have approved Thermo Fisher's
acquisition of Patheon. Thermo
Fisher will commence a tender offer to acquire all of the
issued and outstanding shares of Patheon for $35.00 per share in cash. The transaction
represents a purchase price of approximately $7.2 billion, which includes the assumption of
approximately $2.0 billion of net
debt.
Patheon provides comprehensive, integrated and highly
customizable solutions as well as the expertise to help
biopharmaceutical companies of all sizes satisfy complex
development and manufacturing needs. It is a leader in the
high-growth, $40 billion CDMO market,
which is fueled by growing customer demand for end-to-end
solutions, flexible and scalable capacity, and regulatory
expertise. Patheon has an extensive network of state-of-the-art
facilities primarily in North
America and Europe, and
approximately 9,000 professionals worldwide. The company generated
2016 revenue of approximately $1.9
billion and will become part of Thermo Fisher's Laboratory Products and Services
Segment.
"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 chief executive officer 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."
James C. Mullen, chief executive
officer of Patheon, said, "Over the past several years, we have
increased our capabilities to become a leading CDMO provider in a
highly fragmented market. We are confident that our combined
offerings and Thermo Fisher's proven
track record of disciplined M&A and successful integrations
will take our business to the next level."
Casper added, "We look forward to welcoming our new colleagues
from Patheon to Thermo Fisher.
Patheon's commitment to quality and service excellence is directly
aligned with our focus on helping our biopharma customers
accelerate innovation and drive productivity."
Benefits of the Transaction
- Patheon Provides Entry into the Attractive, High-growth CDMO
Market. Patheon serves a large, fragmented market growing in
the mid-single to high-single digits, which is fueled by strong
demand for outsourcing services that allow customers to simplify
their supply-chain networks. By offering both small- and
large-molecule development and manufacturing solutions, the company
helps customers reduce the time and cost of delivering medicines to
market. Patheon has invested significantly to become a scale player
in the CDMO market and extend its leadership position.
- Combination Significantly Strengthens Thermo Fisher's Unique
Value Proposition for Pharmaceutical and Biotech Customers by
Adding Highly Complementary Services. Thermo Fisher is the leading supplier to the
biopharmaceutical industry, supporting research, clinical trials
and production. It has become a trusted outsourcing partner by
providing clinical trials logistics services over the past decade.
Combining these capabilities with Patheon's CDMO services will
allow Thermo Fisher to be a stronger
partner for pharmaceutical and biotech customers.
- Creates Substantial Synergies and Positions Combined Company
to Further Accelerate Growth. The combined company's extensive
and deep relationships in the biopharma industry will enable
significant cross-selling opportunities. For example, having
biologics development and manufacturing capabilities as well as
bioproduction technologies in one company will allow Thermo Fisher to offer a more comprehensive
portfolio to gain share with these customers.
- Delivers Attractive Financial Benefits. The transaction
is expected to be immediately and significantly accretive to
Thermo Fisher's adjusted
EPS1 by $0.30 in the first
full year after close. Thermo Fisher
expects to realize total synergies of approximately $120 million by year three following the close,
consisting of approximately $90
million of cost synergies and approximately $30 million of adjusted operating
income1 benefit from revenue-related synergies.
Approvals and Financing
The transaction, which is expected to be completed by the end of
2017, is subject to the satisfaction of customary closing
conditions, including the receipt of applicable regulatory
approvals, the adoption of certain resolutions relating to the
transaction at an Extraordinary General Meeting of Patheon's
shareholders, and completion of the tender offer. Thermo Fisher has entered into tender and
support agreements with affiliates of JLL Partners and Royal DSM,
whose collective holdings represent approximately 73% of Patheon
shares, under which they will tender their shares in the
transaction.
Thermo Fisher has obtained
committed debt financing from Goldman Sachs Bank USA and Goldman Sachs Lending Partners LLC.
The company expects to finance the purchase price with debt of
approximately $5.2 billion and equity
of approximately $2 billion. The
offer is not subject to any financing condition.
Advisors
Goldman Sachs & Co. LLC is acting as financial advisor to
Thermo Fisher, and Wachtell, Lipton,
Rosen & Katz is serving as legal counsel. Morgan Stanley &
Co. LLC is acting as financial advisor to Patheon, and Skadden,
Arps, Slate, Meagher & Flom LLP is serving as legal
counsel.
Use of Non-GAAP Financial Measures
In addition to the financial measures prepared in accordance
with generally accepted accounting principles (GAAP), we use
certain non-GAAP financial measures, including adjusted EPS and
adjusted operating income, which exclude certain
acquisition-related costs, including charges for the sale of
inventories revalued at the date of acquisition and significant
transaction costs; restructuring and other costs/income; and
amortization of acquisition-related intangible assets. Adjusted EPS
also excludes certain other gains and losses that are either
isolated or cannot be expected to occur again with any regularity
or predictability, tax provisions/benefits related to the previous
items, benefits from tax credit carryforwards, the impact of
significant tax audits or events and the results of discontinued
operations. We exclude the above items because they are outside of
our normal operations and/or, in certain cases, are difficult to
forecast accurately for future periods. We believe that the use of
non-GAAP measures helps investors to gain a better understanding of
our core operating results and future prospects, consistent with
how management measures and forecasts the company's performance,
especially when comparing such results to previous periods or
forecasts.
Conference Call and Webcast
Thermo Fisher will host a
conference call and webcast at 8:30 a.m.
ET today to provide more information on this announcement.
The webcast and accompanying slides can be accessed in the
Investors section of www.thermofisher.com. An audio archive of the
call will be available in that section of the website until
May 29, 2017.
Conference Call Dial-in:
Domestic: (866) 610-1072
International: (973) 935-2840
Conference ID: 23854275
Replay Dial-in:
Dial-In: (800) 585-8367 or (404) 537-3406
Conference ID: 23854275
About Thermo Fisher
Thermo Fisher Scientific Inc. (NYSE: TMO) is the world leader in
serving science, with revenues of $18
billion and more than 55,000 employees globally. Our mission
is to enable our customers to make the world healthier, cleaner and
safer. We help our customers accelerate life sciences research,
solve complex analytical challenges, improve patient diagnostics
and increase laboratory productivity. Through our premier brands –
Thermo Scientific, Applied Biosystems, Invitrogen, Fisher
Scientific and Unity Lab Services – we offer an unmatched
combination of innovative technologies, purchasing convenience and
comprehensive support. For more information, please visit
www.thermofisher.com.
About Patheon
Patheon is a leading global provider of pharmaceutical
development and manufacturing services. With approximately 9,000
professionals worldwide, Patheon provides a comprehensive,
integrated and highly customizable set of solutions to help clients
of all sizes satisfy complex development and manufacturing needs at
any stage of the pharmaceutical development cycle. A Healthier
World. Delivered.
Forward-looking statements
This communication contains forward-looking statements that
involve a number of risks and uncertainties. Words such as
"believes," "anticipates," "plans," "expects," "seeks,"
"estimates," and similar expressions are intended to identify
forward-looking statements, but other statements that are not
historical facts may also be deemed to be forward-looking
statements. Important factors that could cause actual results to
differ materially from those indicated by forward-looking
statements include risks and uncertainties relating to: the need to
develop new products and adapt to significant technological change;
implementation of strategies for improving growth; general economic
conditions and related uncertainties; dependence on customers'
capital spending policies and government funding policies; the
effect of exchange rate fluctuations on international operations;
use and protection of intellectual property; the effect of changes
in governmental regulations; and the effect of laws and regulations
governing government contracts, as well as the possibility that
expected benefits related to recent and pending acquisitions,
including the proposed transaction, may not materialize as
expected; the proposed transaction not being timely completed, if
completed at all; prior to the completion of the transaction,
Patheon's business experiencing disruptions due to
transaction-related uncertainty or other factors making it more
difficult to maintain relationships with employees, customers,
licensees, other business partners or governmental entities;
difficulty retaining key employees; the outcome of any legal
proceedings related to the proposed transaction; and the parties
being unable to successfully implement integration strategies or to
achieve expected synergies and operating efficiencies within the
expected time-frames or at all. Additional important factors that
could cause actual results to differ materially from those
indicated by such forward-looking statements are set forth in
Thermo Fisher's Annual Report on
Form 10-K for the year ended December 31,
2016, which is on file with the U.S. Securities and Exchange
Commission ("SEC") and available in the "Investors" section of
Thermo Fisher's website,
ir.thermofisher.com, under the heading "SEC Filings," and in any
subsequent Quarterly Reports on Form 10-Q and other documents
Thermo Fisher files with the SEC,
and in Patheon's Annual Report on Form 10-K for the year ended
October 31, 2016 and its subsequent
Quarterly Reports on Form 10-Q, including its Quarterly Report on
Form 10-Q for the quarter ended January 31,
2017, each of which is on file with the SEC and available in
the "Investor Relations" section of Patheon's website,
ir.patheon.com, under the heading "SEC Filings," and in other
documents Patheon files with the SEC. While Thermo Fisher or Patheon may elect to update
forward-looking statements at some point in the future,
Thermo Fisher and Patheon
specifically disclaim any obligation to do so, even if estimates
change and, therefore, you should not rely on these forward-looking
statements as representing either Thermo
Fisher's or Patheon's views as of any date subsequent to
today.
Additional Information and Where to Find It
The tender offer referenced herein has not yet commenced. This
communication is for informational purposes only and is neither an
offer to purchase nor a solicitation of an offer to sell any
ordinary shares of Patheon or any other securities, nor is it a
substitute for the tender offer materials that Thermo Fisher and its acquisition subsidiary
will file with the SEC. On the commencement date of the tender
offer, a tender offer statement on Schedule TO, including an offer
to purchase, a letter of transmittal and related documents, will be
filed with the SEC by Thermo Fisher
and/or its acquisition subsidiary and a solicitation/recommendation
statement on Schedule 14D-9 will be filed with the SEC by Patheon
with respect to the tender offer. The offer to purchase all of the
outstanding ordinary shares of Patheon will only be made pursuant
to the offer to purchase, the letter of transmittal and related
documents filed as a part of the Schedule TO. Patheon will also
file a proxy statement with the SEC in connection with the
extraordinary general meeting of shareholders of Patheon, at which
the Patheon shareholders will vote on certain proposed resolutions
in connection with the transaction (the "EGM Proposals").
THE TENDER OFFER MATERIALS (INCLUDING AN OFFER TO PURCHASE, A
RELATED LETTER OF TRANSMITTAL AND CERTAIN OTHER TENDER OFFER
DOCUMENTS), THE SOLICITATION/RECOMMENDATION STATEMENT ON SCHEDULE
14D-9 AND THE PROXY STATEMENT WILL CONTAIN IMPORTANT INFORMATION.
INVESTORS AND SHAREHOLDERS OF PATHEON ARE URGED TO READ THESE
DOCUMENTS CAREFULLY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL
CONTAIN IMPORTANT INFORMATION THAT SUCH PERSONS SHOULD CONSIDER
BEFORE MAKING ANY DECISION REGARDING TENDERING THEIR ORDINARY
SHARES OR MAKING ANY VOTING DECISION.
The tender offer materials (including the offer to purchase and
the related letter of transmittal and certain other tender offer
documents), the solicitation/recommendation statement and the proxy
statement (when they become available) and other documents filed
with the SEC by Thermo Fisher or
Patheon, may be obtained free of charge at the SEC's website at
www.sec.gov or at Patheon's website at www.patheon.com or by
contacting Patheon's investor relations department at 919-226-3165
or at Thermo Fisher's website at www.thermofisher.com or by
contacting Thermo Fisher's investor
relations department at 781-622-1111. In addition, investors and
shareholders of Patheon may obtain free copies of the tender offer
materials by contacting the information agent for the tender offer
that will be named in the tender offer statement on Schedule
TO.
Participants in the Solicitation
Patheon, its directors and executive officers and other members
of its management and employees, as well as Thermo Fisher and its directors and executive
officers, may be deemed to be participants in the solicitation of
proxies from Patheon's shareholders in connection with the EGM
Proposals. Information about Patheon's directors and executive
officers and their ownership of Patheon ordinary shares is set
forth in the proxy statement for Patheon's 2017 annual general
meeting of shareholders, which was filed with the SEC on
January 26, 2017. Information about
Thermo Fisher's directors and
executive officers is set forth in the proxy statement for
Thermo Fisher's 2017 annual meeting
of stockholders, which was filed with the SEC on April 4, 2017. Shareholders may obtain additional
information regarding the direct and indirect interests of the
participants in the solicitation of proxies in connection with the
EGM Proposals, including the interests of Patheon's directors and
executive officers in the transaction, which may be different than
those of Patheon's shareholders generally, by reading the proxy
statement and other relevant documents regarding the transaction
which will be filed with the SEC.
1 Adjusted earnings per share and adjusted operating
income are non-GAAP measures that exclude certain items detailed
later in this press release under the heading "Use of Non-GAAP
Financial Measures."
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SOURCE Thermo Fisher Scientific Inc.