Thermo Fisher Expand Specialty Diagnostics Presence with The Binding Site

Thermo Fisher Scientific today announced it has entered into a definitive agreement to acquire The Binding Site Group, a specialty diagnostics company, from a shareholder group led by European equity firm Nordic Capital, in an all-cash transaction valued at £2.25 billion ($2.6 billion at current exchange rates).

The Binding Site, a global company serving clinicians and laboratory professionals, provides specialty diagnostic assays and instruments to improve diagnosis and management of blood cancers and immune system disorders. The company’s Freelite, sensitive and specific tests to measure kappa and lambda free light chains, is widely recommended for multiple myeloma diagnosis and monitoring across all stages of the disease by major clinical guideline publications. The assays are based on affinity purified polyclonal antibodies that are coasted onto latex particles. These are used to produce nephelometric and turbidimetric kits — specific for kappa and lambda free light chains.

The Binding Site is headquartered in Birmingham, United Kingdom, and has more than 1,100 employees globally. The company has an attractive financial profile, according to the press release announcing the definitive agreement. Its business has been growing approximately 10% annually and is on track to deliver more than $220 million in revenue in 2022.

“This transaction perfectly aligns with our Mission and is an exciting addition to our existing specialty diagnostic offerings,” said Marc N. Casper, chairman, president, and CEO of Thermo Fisher. With extensive expertise and a large and dedicated installed base in cancer diagnostics, The Binding Site will further enhance our specialty diagnostics portfolio. The Binding Site is extremely well-respected by researchers and clinicians alike for its pioneering diagnosis and monitoring solutions for multiple myeloma. We also know early diagnosis and well-informed treatment decisions for multiple myeloma can make a significant difference in patient outcomes. We are excited by the opportunity to enable further innovation in this area for the benefit of patients and look forward to welcoming The Binding Site team to Thermo Fisher.”

Thermo Fisher is no stranger to M&A, having acquired Mesa Biotech and PPD in 2021 and has produced major success with the integration of the companies. In its Q322 financial call, the company reported that PPD delivered high teens core organic growth and contributed $1.82 billion of revenue to its business segment of the company. Additionally, Q3 operating income in the segment increased 89%, and adjusted operating margin was 13% — 200 basis points higher than Q321.

Additionally, the companies COVID-19 testing sales seem to have been a part of what enabled Thermo Fisher to expand its M&A capabilities. The company now expects $2.8 billion in COVID-19 testing revenue of 2022, which includes the assumption of an endemic run rate level of $100 million per quarter in Q4. These numbers are despite higher-than-normal inflation.

Looking to the future, The Binding Site transaction is expected to be completed in the first half of 2023 and is subject to customary closing conditions, including regulatory approvals. Once the transaction is complete, The Binding Site will become part of Thermo Fisher’s diagnostics segment and is expected to be accretive to adjusted earnings per share by $0.07 for the first full year of ownership, according to the company.

“This announcement marks the beginning of a new and exciting chapter for The Binding Site and is a testament to our team’s singular commitment to improving patient lives through the development and delivery of innovative solutions,” said Stefan Wolf, CEO of The Binding Site. “The Binding Site has long been at the forefront of medical diagnostics and by joining the world leader in serving science, we will be even better positioned to accelerate scientific discovery and expand our product offering for the benefit of our colleagues, customers and, most importantly, the patients we serve.”