GE Healthcare Acquires Thermo Fisher Biz

Zacks Equity Research
January 7, 2014

General Electric Company (GE) and Thermo Fisher Scientific (TMO) recently entered into an agreement for GE Healthcare to buy Thermo Fisher’s gene modulation, HyClone cell culture and magnetic beads businesses for about $1.06 billion.  This acquisition is expected to close in the first half of 2014.

HyClone is used to manufacture vaccines and drugs that treat diseases. The gene modulation business complements the existing drug discovery work of GE Healthcare. The magnetic beads unit will help the company in the areas of protein analysis and diagnostic. In 2013, the three acquired businesses generated combined annual revenues of approximately $250 million.
This acquisition is in line with General Electric’s strategy to invest in high-technology, innovative businesses that deliver strong top-line growth and expand margins. It will help the company to expand and accelerate the development of innovative technologies for cell biology research, cell therapy and for the manufacture of innovative biological medicines and vaccines.

With this acquisition, General Electric will be able to offer its customers a wider range of technologies and services.  The units will become part of GE Healthcare, and help the company offer new medicines, vaccines and diagnostics as part of its expanding life sciences business.

Life Science is one of the strongest and fastest-growing business areas and this deal will further help the company deliver better healthcare services at lower cost. Additionally, General Electric aims to expand in fast-growing Life Sciences sectors; and extend bio processing manufacturing footprint in Asia, the Americas and Europe.

General Electric is one of the largest and most diversified technology and financial services corporations in the world with products and services ranging from aircraft engines, power generation, water processing, and security technology to medical imaging, business and consumer financing, media content, and industrial products.  Its segments include Energy Infrastructure, Aviation, Healthcare, Transportation, Home & Business Solutions and GE Capital.

GE Healthcare provides transformational medical technologies and services to meet the demand for increased access, enhanced quality and affordable healthcare facilities across the globe.

General Electric currently has a Zacks Rank #3 (Hold). Better-ranked stocks in the industry include ITT Corp. (ITT) and Raven Industries Inc (RAVN). Both these stocks carry a Zacks Rank #2 (Buy).

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