On the heels of a move to reduce its viral vector manufacturing workforce, Thermo Fisher is beefing up its biologics production business through a $4.1 billion acquisition.
The buyout target is Solventum’s purification and filtration business, which generated about $1 billion in revenue last year and is expected to grow sales at mid- to high-single-digit percentages in the future, according to Thermo Fisher.
The deal will join the Solventum group with Thermo Fisher’s bioproduction business, which supports the development and manufacturing of biological-based therapeutics and vaccines. The department is focused on offering upstream cell culture, downstream purification, analytics for impurities and a suite of single-use solutions spanning the biologics production workflow.
“The addition of Solventum’s business is an outstanding strategic fit with our company and will create significant value for our customers and shareholders,” Thermo Fisher CEO Marc Casper said in a statement Tuesday.
The Solventum technologies being acquired include filters and membranes used in the manufacturing of biopharmaceutical products, medical technologies and microelectronics, as well as food, beverage products and drinking water. The business operates facilities across the Americas, Asia Pacific, Europe, the Middle East and Africa.
Besides extra revenue, Thermo Fisher expects the addition will improve its bottom line, hoping the company will book about $125 million of adjusted operating income by the fifth year after the closing of the deal. The pair aims to wrap up the transaction by the end of 2025.
“The expected long-term business growth, margin expansion opportunity and synergy realization make the financial returns on the transaction very compelling with a double-digit internal rate of return,” the CDMO and medtech giant said in a statement.
Thermo Fisher’s bioproduction business sits within the company’s life sciences solutions segment. Prior to the Solventum deal, Thermo Fisher last year beefed up that segment with the $3.1 billion purchase of Olink, a Swedish provider of proteomics analysis equipment and services, which can facilitate protein biomarker discovery. That deal complements the CDMO’s mass spectrometry offerings.
For Solventum, the sale is part of a transformation plan that’s been underway since the former 3M healthcare unit’s separation from the conglomerate in April 2024. The new independent company has three other divisions in medical surgical tools, health IT platforms and dental solutions.
“Solventum is committed to ensuring a smooth transition for employees, customers and other stakeholders, and we are confident that Thermo Fisher will provide the Purification & Filtration business […] the strategic investment and resources needed for sustaining growth and delivering customer solutions.,” Solventum CEO Bryan Hanson said in a separate statement Monday.
Thermo Fisher has been undergoing some changes of its own lately. In two layoff rounds announced in recent months, the company has disclosed plans to let go of altogether 460 workers at its viral vector manufacturing facilities in Lexington, Cambridge and Plainville, Massachusetts.