Thermo Fisher Completes $7.2-Billion Acquisition of Patheon
Thermo Fisher Scientific has completed its $7.2-billion acquisition of Patheon, a contract development and manufacturing organization of active pharmaceutical ingredients (APIs) and drug products. Thermo Fisher had announced the acquisition in May 2017.
The acquisition of Patheon provides Thermo Fisher with small- and large-molecule development and manufacturing capabilities as well as formulation development and drug product manufacturing. Thermo Fisher’s products and services support research, clinical trials, and production and includes clinical trials logistics services. Patheon, which has approximately 9,000 employees worldwide, generated 2016 revenue of approximately $1.9 billion and will become part of Thermo Fisher’s Laboratory Products and Services segment. Thermo Fisher expects to realize total synergies of approximately $120 million by year three following the close of the deal, consisting of approximately $90 million of cost synergies and approximately $30 million of adjusted operating income benefit from revenue-related synergies.
For Patheon, its acquisition by Thermo Fisher continues a multiyear process in which the company has been pursuing a strategy of becoming an end-to-end contract services provider of active ingredients (both small molecules and biologics) and its historical core competency in formulation development and drug product manufacturing. The key deal for Patheon dates back to 2014 with the formation of DPx Holdings B.V., privately owned by the private-equity firm JLL Partners (51%) and Royal DSM (49%), which was the result of a $2.65-billion deal between Patheon and DSM completed in March 2014. Since 2012, in addition to DSM Pharmaceutical Products, Patheon has been active on the acquisition front with key acquisitions to build both its active ingredient service capabilities and formulation development and drug-product manufacturing capabilities: Banner Pharmacaps, Gallus BioPharmaceuticals, Agere Pharmaceuticals, IRIX Pharmaceuticals, and a former Roche API manufacturing in Florence, South Carolina.
Source: Thermo Fisher