This acquisition should pay off

Article Excerpt

THERMO FISHER SCIENTIFIC INC. $411 is a buy. The company (New York symbol TMO; Manufacturing sector; Shares outstanding: 395.0 million; Market cap: $162.3 billion; Takeover Target Rating: Medium; Dividend yield: 0.2%; is a leading manufacturer of scientific instruments, laboratory equipment, diagnostic consumables, and life science reagents. The company recently agreed to buy Netherlands-based Qiagen N.V. (New York symbol QGEN). Qiagen has developed diagnostic technology that lets researchers analyze molecular structures at the genetic level. About 89% of Qiagen’s revenue is from recurring consumables and services. That’s better than Thermo Fisher’s 74% of revenue from consumables. Due to resistance from some of Qiagen’s key shareholders, Thermo had to increase its bid 10% to roughly 11.3 billion euros ($12.9 billion). If shareholders accept the new offer, the company expects to complete the deal in the first half of 2021. Qiagen’s expertise should help accelerate Thermo’s development of new testing equipment for the COVID-19 coronavirus. In fact, the U.S. FDA recently approved the company’s new TaqPath COVID-19 test, which…

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