U.S. laboratory equipment maker Thermo Fisher Scientific has reached an agreement to buy genetic testing supply company Qiagen in an $11.5 billion deal.

At 39 euros per share (about $43.42), the cash offer represents a premium of approximately 23% to the closing price of Qiagen on March 2, the companies said. It includes the assumption of approximately $1.4 billion of net debt.

Qiagen is a major supplier of products that prepare tissue and blood samples for advanced testing, including infectious disease testing.

Last month, the company began shipping rapid testing kits to hospitals in China to test for coronavirus, though, in an interview with Reuters, Thermo Fisher chief executive officer Marc Casper said Qiagen’s coronavirus testing business was not an important consideration.

“Deals happen when they happen,” Casper said. “When we got into the last few weeks, things really accelerated here. We were able to come to a price and deal terms that both companies felt are compelling.”

Thermo Fisher said it has already secured bridge financing for the deal, and permanent funding is expected to come from cash on hand and the issuance of new debt. It expects to realize total synergies of $200 million within three years of the close.

SVB Leerink analyst Puneet Souda wrote in a note that the deal wasn’t unexpected. “The acquisition had been largely speculated upon since a challenging quarter and significant changes in management for QGEN back in October 2019 and the fact that QGEN had earlier entered into a discussion for potential strategic alternatives,” Souda wrote.

“We believe investor questions will be around the timing of the deal and what catalyzed it now vs. last year or earlier this year and if management expects that any part of the portfolio will need to be divested given competitive concerns in the market.”

The deal is expected to close in the first half of 2021.

Qiagen shares rose 18% on the news.

Rolf Vennenbernd/picture alliance via Getty Images

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