QIAGEN's (QGEN) Selloff Deal With Thermo Fisher Progresses

The biggest medical device acquisition deal of 2020 has advanced a step forward toward fruition with the receipt of QIAGEN’s QGEN shareholders approval on all agenda items related to its proposed voluntary public takeover by Thermo Fisher Scientific TMO. Announced in March 2020, the deal is expected to close in the first half of 2021 subject to fulfillment of certain customary closing conditions.

Financial Terms of the Deal

We note that the total offer price of this mega deal has been settled at $11.5 billion. Quebec B.V., a wholly-owned subsidiary of Thermo Fisher, will acquire all ordinary shares of QIAGEN for EUR 39 per share in cash.

Thermo Fisher earlier noted that this offer price represents 23% premium to QIAGEN’s Mar 2 closing price, the last trading price before the first announcement. The total transaction value of $11.5 billion, based on the exchange rate during the time of the initiation of the deal, also includes $1.4 billion of net debt.

 

 

The offer acceptance period commenced on May 18  and is scheduled to end on Jul 27, 24:00 hours CEST.

Deal Details

Per this molecular diagnostics and sample preparation technologies major, its acquisition by Thermo Fisher holds potential for both companies. The consolidated company is expected to accelerate the expansion of its solutions suite to serve customers worldwide.

Post integration, QIAGEN’s robust molecular diagnostics presence with focus on infectious disease testing will complement Thermo Fisher’s existing specialty diagnostics capabilities, including allergy, autoimmunity, transplant diagnostics and clinical oncology testing. The consolidated business is anticipated to provide advanced higher-specificity and more comprehensive tests faster at reduced cost.

Further, QIAGEN’s assay and bioinformatics technologies will complement the genetic analysis and biosciences capabilities of Thermo Fisher. This expanded line will significantly boost Thermo Fisher’s research capabilities in life science.

Overall, both the companies expect this deal to be immediately accretive to the consolidated company’s adjusted earnings per share. Total integration synergy is projected at $200 million ($150 million of cost synergies and $50 million of adjusted operating income benefit from revenue synergies) by the third year post the deal’s closure, consisting of $150 million of cost synergies and $50 million of adjusted operating income benefit from revenue synergies.

Meanwhile, in the first half of July 2020, QIAGEN plans to come up with an overview of preliminary results for the second quarter and first half of 2020, along with perspectives on anticipated business trends for the third quarter of 2020. Further, the company also plans to update its earlier-provided expectations for growth trends for full-year 2020 and share perspectives on the potential impact of the coronavirus pandemic on the company’s business.

The company expects to release its second-quarter 2020 results on Aug 4, 2020.

Share Price Performance

Over the past six months, QIAGEN has outperformed the industry it belongs to. The stock has climbed 26.2% compared with the industry’s 12.5% increase.

Zacks Rank & Other Key Picks

Currently, QIAGEN sports a Zacks Rank #1 (Strong Buy).

A few other top-ranked stocks from the broader medical space are Quest Diagnostics Incorporated DGX and Hologic, Inc. HOLX.

Quest Diagnostics’ long-term earnings growth rate is projected at 7.6%. It currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Hologic’s long-term earnings growth rate is estimated at 7%. The company presently has a Zacks Rank #2 (Buy).

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