Why Proteomics Solutions Provider Olink's Shares Are Rocketing Today

Olink Holding AB OLK shares are trading higher by over 65% after Thermo Fisher Scientific Inc TMO announced a deal to acquire the company for about $3.1 billion, including net cash of around $143 million.

As per the terms, TMO will acquire OLK for $26.00 per common share in cash, representing $26.00 per American Depositary Share (ADS) in cash. 

Both the companies' board of directors approved the transaction, which represents a premium of around 74% to the closing price of OLK's American Depositary Shares as on October 16, 2023, the last trading day prior to the announcement of the transaction. 

"The acquisition of Olink underscores the profound impact that proteomics is having as our customers continue to advance life science research and precision medicine. Olink's proven and transformative innovation is highly complementary to our leading mass spectrometry and life sciences platforms. Our company is uniquely positioned to bring this technology to customers enabling them to meaningfully accelerate discovery and scientific breakthroughs," said Marc N. Casper, chairman, president and CEO of Thermo Fisher.

The transaction is expected to be complete by mid-2024, subject to customary closing conditions and completion of the tender offer. 

OLK projects to deliver revenues of $200 million in 2024 and is expected to grow mid-teens organically. 

In the first full year of ownership, the acquisition deal is anticipated to be dilutive to adjusted EPS by $0.17. Excluding financing costs and non-cash deal-related equity compensation costs, the transaction is expected to be accretive to EPS by $0.10 during that period. 

Thermo Fisher anticipates garnering about $125 million of adjusted operating income from revenue and cost synergies by year five following acquisition closure. 

As of July 1, 2023, TMO cash and cash equivalents stood at $3.13 billion. 

Price Action: OLK shares are up 65.72% at $24.83 on the last check Tuesday.