Following a rumor that
) would be acquired by its peer
Thermo Fisher Scientific Inc.
) or by a consortium of a number of private equity firms for
approximately $12 billion, the shares of Life Technologies
reached its 52-week high of $67.85 on Tuesday.
According to several media sources, Thermo Fisher, which was
working on a bid to buy Life Technologies over the past months,
offered a bid price of more than $65 a share. Although the
credibility of this deal remains uncertain, its materialization
will turn out as the biggest ever deal for Thermo Fisher since
its inception in 2006 through a $12.8 billion merger between
Thermo Electron and Fisher Scientific International.
Reuters stated that, as per several people familiar with the
matter, a consortium of some private equity firms was formed to
takeover Life Technologies with a bid close to $65 per share.
Immediately after that, yesterday, Thermo Fisher made a binding
Thermo Fisher met the bid deadline but the private equity
firms who were working on the joint bid, missed it. These firms
are currently working on it in order to secure the equity needed
to take Life Technologies private. The source also stated that,
over the recent past, Thermo Fisher had been considering to bid
for a potential takeover of Life Technologies in the range of
$65−$70 per share.
Thermo Fisher has undertaken several acquisitions in the past
that have added complimentary technologies, expanded presence in
high-growth markets, generated both cost and revenue synergies
thereby creating shareholder value. The proposed acquisition of
Life Technologies in this regard, if completed, will create a
solid position for Thermo Fisher in the field of genetic research
However, considering Life Technologies' current market cap,
which lags a mere $1 billion from the bidding price, we are
doubtful about the materialization of the deal. Based on the past
record and observing once again the steady fundamentals of Life
Technologies along with its huge opportunities in the growing
gene-sequencing market, we remain skeptical about the credibility
of the acquisition news. We prefer to remain on the sidelines
until more visibility is obtained in this regard.
Currently, both Thermo Fisher and Life Technologies carry a
Zacks Rank #3 (Hold). However, other stocks in the medical device
sector, carrying a Zacks Rank #1 (Strong Buy), such as
) appear impressive.
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LIFE TECHNOLOGS (LIFE): Free Stock Analysis
THERMO FISHER (TMO): Free Stock Analysis
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