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Fisher and Apogent merge to form $5.1 billion company.

Hampton, NH and Portsmouth, NH 3/17/04--The boards of Fisher Scientific International and Apogent Technologies have agreed to an all-stock merger. Apogent shareholders will receive tax-free 0.56 shares of Fisher common stock for each share of Apogent stock, or $29.30 per Apogent share, an approximate 5.5% premium over Fisher s March 16 dosing price of $52.32 per share (approximately $2.7 million in stock). Apogent shareholders will own approximately 43% of the combined company, which is estimated to have pro forma 2004 revenues of $5.1 billion. For 2004, the Apogent transaction is forecasted to add 14.0 points to Fisher's revenue growth, bringing it to between 27.5% and 29.5%. 2005 revenue is expected to increase 19% to 21%, with 11.5 points from the Apogent merger. "This transaction expands our portfolio of proprietary consumable products, which creates revenue growth opportunities, enhances our margins and drives earnings growth," said Fisher Scientific Vice Chairman Paul M. Meister. The transaction will result in a $1.1 billion life science products business for Fisher, or 60% of total sales, and will create $55 million in operating synergies in 2005 and potentially $100 million on an annualized basis by the end of 2006. In addition, operating margins are estimated to rise from 10.6% in 2004 to 13.4% in 2005, while operating cash flow is forecasted to rise from $340 million in 2004 to $525 million in 2005, and free cash flow should grow from $215 million this year to $395 million in 2005. Apogent President and CEO Frank H. Jellinek, Jr. will become chairman emeritus of Fisher Scientific. The merger is scheduled to close by July.

Including debt, the deal is estimated at $3.7 billion. Apogent fiscal 2003 revenues totaled $1.097 billion (see IBO 11/15/043). Fisher highlighted the increased cash flow, enhanced global presence, greater service capabilities, expanded biotech production and diagnostic reagent offerings as well as the operational and product synergies the merger enables. Following the merger, Fisher will have $2.7 billion in net debt and four Apogent board members will join its board. The merger is forecasted to be 4% to 5% accretive to earnings per share in 2005. On its conference call, Fisher estimated that the life science market was growing 10% to 12%. Interestingly, Fisher maintained its guidance of organic growth of 6% to 6.5% for 2004. Fisher is Apogent's largest customer
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Title Annotation:Executive briefing: news, trends & market intelligence for instrument executives; Fisher Scientific International Inc., Apogent Technologies Inc.
Publication:Instrument Business Outlook
Geographic Code:1U1NH
Date:Mar 31, 2004
Words:407
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