Thermo Fisher Scientific has agreed to acquire QIAGEN for approximately $11.5 billion cash, the companies said today, in a deal designed to bolster the buyer’s molecular diagnostics capabilities with QIAGEN’s new coronavirus test and other infectious disease assays.
Just last week, QIAGEN said it had shipped its newly developed QIAstat-Dx® Respiratory Panel test kit for assessing SARS-CoV-2 to four hospitals in China for evaluation, following an initial evaluation on clinical samples at Bichat-Claude Bernard Hospital in Paris.
The new kit is designed to rapidly differentiate SARS-CoV-2 from 21 other pathogens implicated in serious respiratory syndromes. The test is a new version of the existing QIAstat-Dx Respiratory Panel, which was introduced in Europe in 2018 as a CE-product and cleared by the FDA in the U.S. last year.
The coronavirus kit is part of Thermo Fisher’s broad specialty diagnostics portfolio, which includes allergy and autoimmunity, transplant diagnostics and clinical oncology testing. That portfolio, Thermo Fisher reasons, would be complemented by adding QIAGEN’s molecular diagnostics offerings, which have focused on infectious disease and other growth opportunities—as well as by applying its commercial reach, including e-commerce platforms, to expand customer access to QIAGEN’s product portfolio, especially in higher-growth emerging markets.
The combined company will accelerate the development of higher-specificity, faster and more comprehensive tests that may improve patient outcomes and reduce the cost of care, Thermo Fisher and QIAGEN asserted.
“We are excited to bring together our complementary offerings to advance our customers’ important work, from discovery to diagnostics,” Marc N. Casper, Thermo Fisher’s chairman, president and CEO, said in a statement. “This acquisition provides us with the opportunity to leverage our industry-leading capabilities and R&D expertise to accelerate innovation and address emerging healthcare needs.
The acquisition would also end a turbulent few months for QIAGEN. The company overhauled its next-generation sequencing (NGS) activity around a 15-year partnership with Illumina aimed at increasing the availability and use of in vitro diagnostics in precision medicine by developing an array of diagnostic tests designed to run on Illumina’s Dx line of sequencers.
More dramatically, Peer Schatz, the company’s longtime CEO and Chairman of the Management Board, announced he was stepping down in October 2019 as the company missed third-quarter revenue targets. Schatz’s departure touched off speculation among industry and market watchers that the company was ripe for a takeover.
A month later, QIAGEN disclosed that it had received “several conditional, non-binding indications of interest” as it began a review of strategic alternatives—a review it ended the following month by saying that it would instead continue as an independent business.
Headquartered in Venlo, the Netherlands, QIAGEN employs approximately 5,100 people at 35 locations in more than 25 countries. The company generated 2019 revenue of $1.53 billion.
QIAGEN develops sample preparation technologies designed to extract, isolate, and purify DNA, RNA, and proteins from a wide range of biological samples—as well as assay technologies designed to amplify and enrich these biomolecules for analysis. QIAGEN’s instruments can be used to automate these workflows, while its bioinformatics systems provide customers with relevant, actionable insights.
“Our vision at QIAGEN has always been to make improvements in life possible with our differentiated Sample to Insight molecular testing solutions,” said Thierry Bernard, interim chief executive officer of QIAGEN N.V. and senior vice president, head of the molecular diagnostics business area. “This strategic step with Thermo Fisher will enable us to enter a promising new era and will give our employees the opportunity to have an even greater impact.
Casper added that Thermo Fisher expects the acquisition of QIAGEN to immediately add to its earnings per share—as well as generate “significant cost and revenue synergies” of $200 million by the third year after the close of the deal. That $200 million is projected to consist of $150 million in expense reduction “cost synergies,” and $50 million in adjusted operating income gain “revenue synergies.”
The $11.5 billion deal price includes Thermo Fisher assuming $1.4 billion of QIAGEN debt.
At €39 ($43) per share, Thermo Fisher’s offer price represents a premium of approximately 23% to the closing price of QIAGEN’s common stock yesterday on the Frankfurt Prime Standard. Thermo Fisher plans to commence a tender offer to acquire all ordinary shares of QIAGEN.
The boards of Thermo Fisher and QIAGEN have approved the acquisition deal, which is set to be completed in the first half of 2021, subject to satisfying customary closing conditions that include regulatory approvals, the adoption of certain resolutions relating to the transaction at an Extraordinary General Meeting of QIAGEN’s shareholders, and completion of the tender offer.
Thermo Fisher has obtained an unspecified amount of committed bridge financing, the companies added, with permanent funding for the deal expected to come from cash on hand and the issuance of new debt. The transaction is not subject to any financing condition.
“We look forward to welcoming QIAGEN’s employees to Thermo Fisher and are excited about the new opportunities we’ll have to advance precision medicine through new molecular diagnostics and improved life sciences workflows,” Thermo Fisher’s Casper stated.
Added QIAGEN’s Bernard: “The combination is designed to deliver significant cash value to our shareholders, while enabling us to accelerate the expansion of our solutions to provide customers worldwide with breakthroughs that advance our knowledge about the science of life and improve health outcomes.”