Waltham-based medical equipment company Thermo Fisher Scientific Inc. said Monday it will buy diagnostic test maker One Lambda Inc. for $925 million, the third-largest in a series of acquisitions at the heart of an aggressive expansion strategy.
The acquisition is intended to make Thermo Fisher a global player in organ transplant products. One Lambda, based in Canoga Park, Calif., makes tests that identify compatible organ donors and recipients, and that detect antibodies which signal the body’s potential rejection of a transplanted organ.
Marc Casper, chief executive, said the acquisition will help Thermo Fisher meet steadily growing demand for organ transplant diagnostic systems in developing economies, a $480 million worldwide market.
“We’re seeing accelerating growth in Brazil and China,” said Casper. “As those health systems become more mature, things like transplantation become more available.”
Thermo Fisher is well-placed to move One Lambda’s technology into new markets, Casper said, since nearly half of Thermo Fisher’s 2011 revenue of $11.73 billion came from outside the United States. At present, 80 percent of One Lambda’s revenue comes from the United States and Europe.
With 320 employees and 2011 revenues of $182 million last year, One Lambda is also expected to add 9 to 11 cents per share to Thermo Fisher’s adjusted earnings in 2013. Thermo Fisher earned 75 cents a share in the first quarter of 2012. “This actually looks like a really good deal for Thermo,” said Doug Schenkel, senior research analyst at Cowen & Co. in Boston. Schenkel called the acquisition price reasonable, but warned that One Lambda’s long-term future may not be so rosy, because new gene sequencing technologies now under development could supplant its donor compatibility tests in five to 10 years.
Thermo Fisher has been buying companies that expand its product lines and operations around the world, spending at least $6.8 billion on 27 acquisitions in the past five years, according to Bloomberg News. Much of the acquisition binge has been financed by debt; the company’s long-term obligations jumped from $2 billion in 2010 to $5.7 billion last year.
Thermo Fisher said it will finance the One Lambda purchase with a combination of cash and debt; that it will spend an additional $500 million this year to buy back shares of the company; and that it will continue to pay a quarterly dividend of 13 cents per share.
After the One Lambda deal was revealed on Monday, three credit agencies — Moody’s Investors Service, Fitch Ratings, and Standard & Poor’s Financial Services — lowered Thermo Fisher’s credit rating. Moody’s predicted that Thermo Fisher will raise an additional $1.3 billion of debt to pay for the acquisition and share repurchases.
A Thermo Fisher spokeswoman said no one at the company was available to comment on the downgrades. Thermo Fisher “has consistently demonstrated financial policies that favor shareholders at the expense of creditors,” said Moody’s senior analyst Jessica Gladstone in a press release .
Thermo Fisher was formed in 2006 through the $10.6 billion merger of Thermo Electron Corp. and Fisher Scientific International Inc. It completed its biggest acquisition in August 2011, when the company paid $3.5 billion for Phadia AB, a Swedish maker of blood tests for allergies and autoimmune disorders. In May 2011, the company spent about $2.1 billion to buy Dionex Corp., a California maker of chromatography equipment, which is used in testing a variety of drugs and chemicals.