Thermo Fisher Scientific Inc. (TMO): Is It Getting a Good Deal With Life Technologies Corp. (LIFE)?

But did Thermo Fisher Scientific Inc. (NYSE:TMO) get a good deal? The large lab equipment and services company isn’t really getting a bargain. Life Technologies’ price-to-earnings multiple already looked high.The $76 per share price topped what many analysts though the stock would fetch.

There are some cost synergies, but not enough to get excited about. Thermo Fisher estimates that by year three it should see $250 million of cost synergies and another $25 million of revenue synergies.

However, what Thermo Fisher Scientific Inc. (NYSE:TMO) does get is a nearly $4 billion per year business that complements its current products. The deal also enables the company to jump headfirst into the hot area of genomic testing. Customers seem likely to appreciate the wide array of services that will be available with the combined companies.

My view is that the two companies make a good fit, and the potential exists for the combination to work out really well. How great was the deal itself, though? Only time will tell.

The article Is Thermo Fisher Getting a Good Deal With Life Technologies? originally appeared on Fool.com and is written by Keith Speights.

Fool contributor Keith Speights has no position in any stocks mentioned. The Motley Fool recommends Illumina and Thermo Fisher Scientific.

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