Medical device giant Thermo Fisher Scientific Inc. is eyeing more acquisitions after selling one of its business units for more than $1 billion, with executives discussing plans during an earnings call Wednesday.
Thermo Fisher announced earlier this week that it is selling its anatomical pathology business, which produces microscope slides, tissue processing agents and other laboratory instruments and consumables, to Japanese firm PHC Holdings. The Waltham-based firm will earn $1.14 billion from the sale, according to a Jan. 28 press release.
The anatomical pathology business sale leaves Thermo Fisher with what Evercore ISI Partner Ross Muken called a substantial war chest.
The company ended 2018 with $2.1 billion in cash — nearly double the amount its had in previous years, according to the Thermo Fisher’s financial disclosures.
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“Primarily we spend capital on (mergers and acquisitions). We’ve strengthened the balance sheet substantially, and the anatomical pathology sale will give us even more firepower to deploy over time,” Thermo Fisher CEO Marc Casper said when asked about plans for the profits of the anatomical pathology sale. “We don’t know the timing of the M&A, but over time, you’ll see us continue to deploy capital.”
The company declined to further disclose any potential acquisition plans to the Business Journal or analysts.
Thermo Fisher has 70,000 employees worldwide, including 2,000 employees in Massachusetts.
Thermo Fisher ended 2018 with a 16 percent growth in revenue, nearly half of which was driven by business acquisitions. It bought five businesses over the last two years, including drug ingredients maker Pantheon NV for $5.2 billion in 2017.
The device company ultimately brought in $24.36 billion in revenue last year.
The anatomical pathology business contributed approximately $350 million in revenue last year, including $100 million from sales made through channel businesses. The company will continue to sell the pathology products after the divestiture, according to Chief Financial Officer Stephen Williamson.
Roughly 1,200 people are employed in anatomical pathology business locations in the U.S., Europe and China. The company did not respond to questions about the sales’ impact on any local employees.
The sale is expected to close by mid-2019.
Date: February 4, 2019
Source: Boston Business Journals