Thermo Fisher Scientific Inc made a binding offer for Life Technologies Corp on Tuesday as private equity firms raced to finalize a consortium to take the genetic testing equipment maker private, several people familiar with the matter said.
Life Tech, with a current market value of more than $11 billion, has become an attractive target due to its strength in advanced diagnostics and gene sequencing and if Thermo Fisher were to prevail, the deal would make it a major player in the genetic sequencing market.
It would be also be by far its biggest deal since the $12.8 billion merger in 2006 of Thermo Electron and Fisher Scientific International that created the world’s largest maker of scientific equipment and laboratory instruments.
Thermo Fisher met a bid deadline on Tuesday but private equity firms working on a joint bid missed it and were working late into the evening to secure the equity required to support an offer, the people said.
Blackstone Group LP, Carlyle Group LP and Singapore’s state investor Temasek Holdings were in talks with KKR & Co LP about securing the required equity and finalizing a buyout consortium, the people said.
Life Technologies would likely accept an offer past the bid deadline to keep the process competitive, the people added.
Thermo Fisher is bidding more than $65 per each Life Tech share, two of the people said. While the exact price could not be learned, Thermo had been considering a bid of $65 to $70 per share, sources said last week.
The private equity group would likely bid close to $65 per share, two separate people said.
All the people asked not to be named because details of the auction are not public. Life Technologies, Thermo Fisher, KKR, Blackstone and Carlyle declined to comment while Temasek did not respond to a request for comment.
Shares of Life Tech ended up 1.3 percent at $66.19 on Tuesday, giving it a market value of $11.3 billion. They are up 33 percent so far this year on expectations of a possible deal, outperforming a 9.6 percent rise in the S&P 500 index.
At this level, Life Tech trades at 14.6 times forward 12-month earningscompared to an average 13.6 times for its peer group, according to Thomson Reuters data.
Carlsbad, California-based Life Tech, which has hired advisers to explore a sale, had also attracted interest from industrial and healthcare conglomerate Danaher Corp and drugmaker Roche Holding AG, people familiar with the matter told Reuters previously.
While their position could not be confirmed, one of the people said that neither of these two companies had carried out the procedural work necessary ahead of the bid deadline that would have allowed them to make offers. Danaher and Roche did not respond to requests for comment.
Roche, which has its own diagnostics business, made a hostile run at genetic sequencing company Illumina Inc last year but walked away from the $6.8 billion offer, refusing demands to raise the bid.
Life Tech is itself the product of the combination of two companies — Invitrogen, a maker of cultures used in the manufacture of biotech medicines, and Applied Biosystems, a genetic testing company.
If Thermo Fisher wins the auction, it would also boost its presence in scientific research, genetic analysis and applied sciences, creating a healthcare technology giant with annual revenues of over $16 billion and some 50,000 employees.
At a range of $65 to $70 per share for Life Tech, Thermo Fisher believes the deal would add to its earnings, people familiar with the matter have previously told Reuters.
Greg Roumeliotis and Soyoung Kim, Reuters.