JP Morgan Comments On Thermo Fisher Scientific Following Divestures, Buybacks

With closure of the Quest Diagnostics acquisition of Athena Diagnostics this morning, JP Morgan is updating its Thermo Fisher Scientific TMO estimates to reflect the divestitures, as well as share repurchases, convertible debt redemptions and new debt offerings. Due to J.P. Morgan's involvement in the DNEX transaction, the estimates do not include the impact of the acquisition, which is expected to close in Q2. On 2/24, TMO announced the sale of Athena Diagnostics to Quest for $740M and Lancaster Laboratories to EuroFins for $200M. JP Morgan views the divestitures positively, and largely expected, given previous management commentary about focusing more on analytical technologies. After spending $1B on share repurchases in 2010, TMO is targeting $1.25B in repurchases through 2/12, with further accretion expected from convertible debt redemption. For 2011, JP Morgan expects a fully diluted share count of ~385M, including a 2.9M share benefit from convertible shares redeemed on 3/30. JP Morgan closed Monday at $55.85