Published: December 13, 2010
Thermo Fisher Scientific to Acquire Dionex Corporation
WALTHAM, Mass. & SUNNYVALE, Calif. - (BUSINESS WIRE) - Thermo Fisher Scientific (NYSE: TMO), the world leader in serving
science, and Dionex Corporation (NASDAQ: DNEX), a leading manufacturer
and marketer of chromatography systems, today announced that their
Boards of Directors have unanimously approved a transaction under which
Thermo Fisher will acquire all of the outstanding shares of Dionex for
$118.50 per share in cash, or a total purchase price of approximately
$2.1 billion. The transaction is not conditioned on financing and is
expected to be completed in the first quarter of 2011.
Under the terms of the agreement, Thermo Fisher will commence a tender
offer to acquire all of the outstanding shares of Dionex common stock
for $118.50 per share in cash. The consideration represents a 21%
premium to Dionex's closing stock price on December 10, 2010, the last
trading day prior to today's announcement and a 32% premium to Dionex's
average closing stock price over the last 60 trading days. Thermo Fisher
expects to realize total operating synergies of $60 million in year
three following the transaction's close through a combination of cost
savings and revenue enhancements. The transaction is expected to be
immediately accretive to Thermo Fisher's adjusted earnings per share by
$0.13 to $0.15 in the first 12 months following the close. 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."
Dionex, based in Sunnyvale, Calif., introduced the first ion
chromatography system for water analysis shortly after its founding in
1975 and has consistently grown through innovation and global expansion.
Today, the company has more than 1,600 employees in 21 countries
spanning six continents, including a significant presence in the
Asia-Pacific region. Dionex will be integrated into Thermo Fisher's
Analytical Technologies Segment.
"We believe the combination of Thermo Fisher and Dionex is extremely
compelling from a technology, market and financial perspective," said
Marc N. Casper, president and chief executive officer of Thermo Fisher.
"Dionex's strength in chromatography instruments, software and
consumables complements our leading positions in mass spectrometry and
laboratory information management systems. The transaction, which we
expect to be immediately accretive, is consistent with our strategy of
accelerating growth by increasing our depth of capabilities to serve
attractive end markets. Specifically, it complements our strong presence
in China, where we've established the headquarters for our global
environmental instruments business and continue to build our commercial
infrastructure to meet the needs of customers in growing water quality,
consumer safety and life sciences markets."
"We are pleased to be joining Thermo Fisher and are excited about the
opportunities we will have as part of the world leader in serving
science," said Frank Witney, president and chief executive officer of
Dionex. "Thermo Fisher's commitment to innovation will fuel our ongoing
technology development, and their global manufacturing and commercial
presence will significantly strengthen our ability to deliver quality
products and services to our customers around the world. This
transaction offers immediate and significant value for our shareholders,
as well as the opportunity for our customers and employees to benefit
from combining two highly complementary organizations. We look forward
to working closely with the Thermo Fisher team to ensure a smooth
transition and complete the transaction as expeditiously as possible."
Mr. Casper continued, "We are delighted to welcome Dionex's talented and
dedicated employees to our team. Together, we will offer our customers
new solutions based on a powerful combination of leading instruments,
software, consumables and services."
Benefits of the Transaction
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Creates a Leading Chromatography Offering: The transaction
brings two complementary chromatography portfolios together to create
the most extensive chromatography instruments, software and
consumables offering in the industry. Specifically, it combines
Dionex's ion and liquid chromatography systems and consumables with
Thermo Fisher's gas chromatography systems and consumables.
-
Improves Performance and Productivity: Customers will benefit
from the combination of Thermo Fisher's leadership in mass
spectrometry with Dionex's comprehensive chromatography offering. By
integrating these leading technologies and related software, Thermo
Fisher will be able to deliver exceptional performance and
productivity for customers through improved sample analysis and data
management.
-
Strengthens Software Growth Platform: Dionex's gold standard
chromatography data system coupled with Thermo Fisher's leading
enterprise laboratory information management systems creates the most
comprehensive desktop and enterprise software capabilities in the
industry. This combination will significantly improve performance,
productivity and compliance for customers to maximize their return on
investment.
-
Expands Presence in Applied Markets: Thermo Fisher will benefit
from Dionex's significant customer base and relationships in
attractive applied markets, including environmental analysis, food
safety and other industrial sectors. Through this combination, Thermo
Fisher will be able to deliver unmatched analytical solutions for a
growing range of testing needs, particularly water analysis, where
growth is driven by new regulatory requirements and increased testing
in developing countries such as China.
-
Increases Footprint in Asia-Pacific: Dionex currently generates
more than 35% of its revenues in Asia-Pacific and other emerging
high-growth geographies. The company has a history of growth in the
region by establishing a strong reputation through its well-regarded
direct sales and service presence there. This transaction is
consistent with Thermo Fisher's strategy of investing to increase its
footprint in Asian markets, such as China and India, as well as other
strategic growth markets, like Brazil.
-
Offers Significant Synergies: The transaction is expected to
generate a total of approximately $60 million of cost and revenue
synergies in year three after the transaction's close. This includes
approximately $40 million from cost-related synergies and $20 million
of adjusted operating income benefit from revenue-related synergies.
Mr. Casper concluded, "The acquisition of Dionex is another example of
the great progress we're making in executing on our strategy to
accelerate growth. We have invested in technology innovation, Asia
expansion and complementary acquisitions - all to strengthen our growth
opportunities in attractive end markets. We are focused on these
strategic investments because they create value for all our key
stakeholders - customers, employees and shareholders."
Financing and Approvals
Thermo Fisher intends to use cash on hand and proceeds from committed
financing from Barclays Capital and J.P. Morgan Securities LLC to
facilitate the transaction. The transaction, which is expected to be
completed in the first quarter of 2011, is subject to the satisfaction
of customary closing conditions, including applicable regulatory
approvals.
Advisors
Barclays Capital and J.P. Morgan Securities LLC are acting as financial
advisors to Thermo Fisher, and Wachtell, Lipton, Rosen & Katz is serving
as legal counsel. Goldman, Sachs & Co. is acting as financial advisor to
Dionex, and Cooley LLP is serving as legal counsel.
Use of Non-GAAP Financial Measures
In addition to financial measures prepared in accordance with generally
accepted accounting principles (GAAP), we use the non-GAAP financial
measures adjusted operating income and adjusted earnings per share.
Adjusted operating income excludes restructuring and other costs/income
and amortization of acquisition-related intangible assets. Adjusted
earnings per share also excludes certain other gains and losses, tax
provisions/benefits related to the previous items, benefits from tax
credit carryforwards, the impact of significant tax audits or events and
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 and Dionex will host a conference call and Webcast at 8:30
a.m. EST today to provide more information on this announcement. The
Webcast and accompanying slides can be accessed at www.thermofisher.com
and www.dionex.com.
An audio archive of the call will be available on both companies'
Websites until December 27, 2010, at 11:59 pm EST.
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Conference Call Dial-in:
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Domestic:
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(866) 610-1072
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International:
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(973) 935-2840
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Passcode:
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31400437
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Replay Dial-in:
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Domestic:
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(800) 642-1687
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International:
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(706) 645-9291
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Passcode:
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31400437
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About Thermo Fisher
Thermo Fisher Scientific Inc. (NYSE: TMO) is the world leader in serving
science. Our mission is to enable our customers to make the world
healthier, cleaner and safer. With revenues of more than $10 billion, we
have approximately 35,000 employees and serve customers within
pharmaceutical and biotech companies, hospitals and clinical diagnostic
labs, universities, research institutions and government agencies, as
well as in environmental and process control industries. We create value
for our key stakeholders through two premier brands, Thermo Scientific
and Fisher Scientific, which offer a unique combination of continuous
technology development and the most convenient purchasing options. Our
products and services help accelerate the pace of scientific discovery,
and solve analytical challenges ranging from complex research to routine
testing to field applications. Visit www.thermofisher.com.
About Dionex
Dionex (NASDAQ:DNEX) is a global leader in the manufacturing and
marketing of liquid chromatography and sample preparation systems,
consumables, and software for chemical analysis. The company's systems
are used worldwide in environmental analysis and by the life sciences,
chemical, petrochemical, food and beverage, power generation, and
electronics industries. Our expertise in applications and
instrumentation helps analytical scientists to evaluate and develop
pharmaceuticals, establish environmental regulations, and produce better
industrial products.
Safe Harbor Statement
The following constitutes a "Safe Harbor" statement under the Private
Securities Litigation Reform Act of 1995: This press release contains
forward-looking statements that involve a number of risks and
uncertainties. 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 and Dionex's respective
quarterly and annual reports, under the caption "Risk Factors" , which
are on file with the Securities and Exchange Commission (the "SEC" ) and
available on Thermo Fisher's and Dionex's respective websites.
Additional important factors that could cause actual results to differ
materially from those indicated by forward-looking statements include
risks and uncertainties relating to: competition and its effect on
pricing, spending, third-party relationships and revenues; the need to
develop new products and adapt to significant technological change;
implementation of strategies for improving growth; general worldwide
economic conditions including economic conditions in the areas in which
Thermo Fisher and Dionex sell products, and related uncertainties;
dependence on customers' capital spending policies and government
funding policies; the effect of exchange rate fluctuations on
international operations; demand for analytical instrumentation; the
effect of healthcare reform legislation; 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
the transaction may not materialize as expected; the transaction not
being timely completed, if completed at all; prior to the completion of
the transaction, Dionex's business experiencing disruptions due to
transaction-related uncertainty or other factors making it more
difficult to maintain relationships with employees, licensees, other
business partners or governmental entities; and the parties being unable
to successfully implement integration strategies. While Thermo Fisher
and/or Dionex may elect to update forward-looking statements at some
point in the future, Thermo Fisher and Dionex specifically disclaim any
obligation to do so, even if estimates change and, therefore, you should
not rely on these forward-looking statements as representing our views
as of any date subsequent to today.
Additional Information
The planned tender offer described in this release has not yet
commenced. The description contained in this release is not an offer to
buy or the solicitation of an offer to sell securities. At the time the
planned tender offer is commenced, Thermo Fisher (or a wholly owned
subsidiary of Thermo Fisher) will file a tender offer statement on
Schedule TO with the Securities and Exchange Commission (the "SEC" ), and
Dionex will file a solicitation/recommendation statement on Schedule
14D-9 with respect to the planned tender offer. The tender offer
statement (including an offer to purchase, a related letter of
transmittal and other tender offer documents) and the
solicitation/recommendation statement will contain important information
that should be read carefully before making any decision to tender
securities in the planned tender offer. Those materials will be made
available to Dionex's stockholders at no expense to them. In addition,
all of those materials (and all other tender offer documents filed with
the SEC) will be made available at no charge on the SEC's website: www.sec.gov.
Thermo Fisher Scientific
Investors:
Ken
Apicerno, 781-622-1294
ken.apicerno@thermofisher.com
or
Media:
Karen
Kirkwood, 781-622-1306
karen.kirkwood@thermofisher.com
or
Dionex
Craig
McCollam, 408-481-4107
craig.mccollam@dionex.com
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