Thermo Fisher Said to Near $2.3bn Deal for Binding Site

Thermo Fisher Scientific agreed to acquire British specialty diagnostics firm Binding Site in a deal valued at $2.6bn.

The US instrument maker will buy Birmingham, England-based Binding Site in an all-cash deal from owners led by buyout firm Nordic Capital, according to a statement Monday confirming an earlier Bloomberg News report.

Binding Site is developing diagnostic products to detect and monitor protein-based blood disorders, such as multiple myeloma, and caters to clinicians and laboratory professionals. The firm reaches more than 3,000 customers in hospitals, academic institutions and pharmaceutical companies.

The transaction could point to a revival of dealmaking in Europe, where mergers and acquisition volumes have declined sharply this quarter. Health-care transactions remain an active sector for merger activity, especially as US-based buyers benefit from a strong dollar when paying for pound-denominated assets.

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Waltham, Massachusetts-based Thermo Fisher, which makes scientific instruments and helps manufacture drugs, is among the most acquisitive life-sciences companies. Last year it bought PPD Inc., a provider of clinical and research services, for about $20 billion. In January, it announced it had closed the acquisition of PeproTech, a closely held provider of recombinant proteins, for about $1.85 billion cash.

Nordic Capital has recently raised a new buyout fund of €9 billion ($8.9 billion) despite a challenging fundraising environment as investors keep cash, cut allocations to private equity and wait for funds to return money before reinvesting. The Stockholm-based firm has a track record in the health care space and is widely regarded as one of the most successful PE funds in that space. It initially invested in Binding Site 11 years ago.

Binding Site was started as a spinout from the University of Birmingham. During Nordic Capital’s ownership, the company’s annual revenue increased about fivefold to almost £200 million and it boosted the number of instruments installed more than tenfold.

The sale is set to be one of Nordic Capital’s best exits with a nearly 19 times multiple on invested capital since its initial investment and a 35% internal rate of return, according to people with knowledge of the matter.

“We invest in R&D rather than just focusing on the bottom line,” said Raj Shah, a partner at Nordic Capital and head of its health-care practice, who was previously a cardiac surgeon. “It is a business that innovates products and has a pipeline of new products coming to the market. That’s why it is of interest for a strategic buyer.”

Source: Yahoo Finance

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