Thermo Fisher Scientific
) recently inked a definitive agreement with private equity firm
GTCR, LLC whereby the latter has agreed to buy the Cole-Parmer
channel business of Thermo Fisher for a deal value of $480 million.
Thermo Fisher expects the deal, which is likely to be closed in the
third quarter, to have immaterial impact on the company's 2014
adjusted earnings per share (EPS).
The company will provide an updated annual guidance for 2014
during its second quarter earnings release which is slated to be
released before the opening bell on Jul 23.
However, for the second quarter, Thermo Fisher had earlier
assumed to post an EPS lower than the street number. This,
according to the company, is because of some seasonal impact in the
said quarter as salary increases have been affected during the
period. This may have an impact on the quarterly bottom line.
Based in Illinois, Cole-Parmer is a part of Thermo Fisher's
Laboratory Products and Services Segment. This business provides
fluid handling, test and measurement, and electrochemistry products
and services. This business generated a significant $230 million in
revenues during the last fiscal.
The sellout decision is consistent with Thermo Fisher's strategy
to focus on its core segment. With the successful completion of the
Life Technologies' takeover, the company is currently emphasizing
on research, Specialty Diagnostics and applied markets. In
addition, the company is currently working on the growth
opportunities in Asia Pacific and emerging markets.
Earlier in March, to fulfill the closing conditions related to
the Life Technology acquisition, Thermo Fisher divested 3 of its
business divisions to GE Healthcare, a unit of
General Electric Co.
). Per the deal, GE Healthcare bought Thermo Fisher's gene
modulation, cell culture and magnetic beads businesses for about
Thermo Fisher currently carries a Zacks Rank #4 (Sell).
Other Stocks to Consider
While we choose to avoid Thermo Fisher at the moment, investors
interested in the medical instrument sector can consider stocks
). Both the stocks sport a Zacks Rank #1 (Strong Buy).
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