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Thermo Fisher's offer of $35 per share represents a premium of
about 35 percent to Patheon's Friday close. Patheon shares were
up about 33 percent in premarket trading.
The deal represents a purchase price of about $7.2 billion,
which includes the assumption of about $2.0 billion of net debt,
the companies said in a statement.
Thermo Fisher, which already supplies the biopharmaceutical
industry with research, clinical trials and production services,
will now have the drug ingredients maker's abilities as
drugmakers look to cut costs and reduce clinical trial times.
The contract research space is in the midst of a wave of
consolidation with INC Research Holdings Inc <INCR.O> last week
saying it would merge with inVentiv Health Inc in a $4.6 billion
deal to help it win contracts with large pharma companies.
The transaction, which is expected to be completed by the end of
2017, will immediately add to Thermo Fisher's adjusted profit by
30 cents in the first full year after close.
Goldman Sachs & Co is acting as financial adviser to Thermo
Fisher, and Wachtell, Lipton, Rosen & Katz is serving as legal
counsel.
Morgan Stanley & Co is Patheon's financial adviser, and Skadden,
Arps, Slate, Meagher & Flom LLP is its legal counsel.
(Reporting by Ankur Banerjee in Bengaluru; Editing by Shounak
Dasgupta and Martina D'Couto)
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