Solventum Sells Purification & Filtration Unit to Thermo Fisher for $4B, Boosts EPS Guidance

Solventum has sold its Purification & Filtration business to Thermo Fisher Scientific for $4 billion in cash. The deal is a key part of Solventum's plan to focus on its remaining businesses. As a result, Solventum has raised its full-year EPS guidance. The transaction is expected to be completed in the fourth quarter of 2022.

Thermo Fisher Scientific Inc. (NYSE: TMO) has announced the completion of its acquisition of Solventum’s Purification & Filtration business, a strategic move to bolster its bioprocessing portfolio. The deal, valued at approximately $4.0 billion in cash, will see the Filtration and Separation business integrated into Thermo Fisher’s Life Sciences Solutions segment. The transaction, expected to close in the fourth quarter of 2022, includes advanced filtration technologies that will enhance Thermo Fisher’s offerings in bioprocessing and industrial filtration.

The acquisition of Solventum’s Purification & Filtration business will strengthen Thermo Fisher’s bioproduction capabilities, particularly in the healthcare and industrial sectors. The business is expected to generate around $750 million in revenue for the full year 2025. According to Marc N. Casper, chairman, president, and chief executive officer of Thermo Fisher, the addition of these innovative filtration technologies will serve the end-to-end needs of pharma and biotech customers, while also expanding into adjacent markets such as battery, semiconductor, and medical device manufacturing.

The integration of this business is anticipated to drive mid- to high-single digit organic growth, with strong margin expansion and synergy realization. While the transaction is expected to be dilutive to adjusted earnings per share (EPS) in the first year by $0.06, Thermo Fisher expects to realize significant cost synergies, with approximately $125 million in adjusted operating income from revenue and cost synergies by year five. The expected internal rate of return is anticipated to be double-digit, making the financial returns on the transaction compelling.

The acquisition was advised by WilmerHale, Axinn, Latham & Watkins, Hogan Lovells, and Wells Fargo. Thermo Fisher expects to integrate the business smoothly, with the application of the PPI Business System enabling strong margin expansion and meaningful synergy realization.

References:
[1] https://www.stocktitan.net/news/TMO/thermo-fisher-scientific-completes-acquisition-of-solventum-s-rey9hb9dfouh.html