Laboratory equipment company Thermo Fisher Scientific Inc. struck a deal to acquire private equity-owned Phadia, a maker of allergy and autoimmune tests, for $3.5 billion to expand in specialty diagnostics.
Thermo said Thursday the deal to buy Sweden-based Phadia from European private equity firm Cinven would immediately add to earnings.
The deal, seen closing in the fourth quarter, is expected to increase earnings by 26 to 30 cents per share in 2012, Thermo said. That would amount to a roughly 6 percent boost to analysts' average profit forecast of $4.68 per share, according to Thomson Reuters I/B/E/S.
Thermo shares rose 4.5 percent to $65.60 in early trading.
"It's a decent deal for them," said Peter McDonald, an analyst at Auriga USA. "It fits well with their specialty diagnostics business, it leverages some of their infrastructure, and it will probably do well."
Phadia had 2010 sales of $525 million and has increased revenue by about 10 percent annually, on average, for the last three years on a constant-currency basis.
Phadia specializes in invitro allergy diagnostics and is a European leader in autoimmunity diagnostics, Thermo said.
"Thermo has very good distribution," McDonald said. "They like to buy these products and pump them through their channels, so I think this is not a bad use of their cash. It's expensive, but that's what you have to pay to be in this space."
Thermo Chief Executive Officer Marc Casper said in a statement that Phadia "has significant growth opportunities in the large, under-penetrated U.S. market, and can leverage our strong presence in emerging geographies to further accelerate growth."
Thermo intends to use committed debt financing from Barclays Capital and cash on hand for the Phadia transaction.
Barclays is advising Thermo Fisher, while Goldman Sachs is acting as financial adviser to Phadia.
Thermo is also involved in the auction for diagnostic test maker Gen-Probe Inc, the Wall Street Journal reported on Wednesday.
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