Big Four Private Equity Firms Join Hands For Life Technologies

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Life Technologies Corp. (NASDAQ:LIFE) hasn’t received so much attention in all the years of its business. But suddenly a consortium formed by Carlyle Group LP (NASDAQ:CG), The Blackstone Group L.P. (NYSE:BX), KKR & Co. L.P. (NYSE:KKR) and Singapore’s Temasek Holdings Ltd. has initiated a bidding war by offering about $11.1 billion to acquire the high-tech medical equipment maker, people familiar with the matter told the Wall Street Journal.

Life Technologies Logo

Earlier on Tuesday, laboratory equipment maker Thermo Fischer Scientific Inc. also submitted a bid which is estimated to be at the higher end of the $65-$70 a share range. The private equity group’s bid values Life Technologies Corp. (NASDAQ:LIFE) at about $65 per share, lower than its Wednesday closing price of $66.58 per share.

According to reports, the private equity team believes that the Thermo Fischer offer would face antitrust issues. The stock is up 36 percent this year amid rising expectations of a takeover.

Though the company’s sales have risen five fold between 2003 and 2012 to reach $3.8 billion, the stock hasn’t witnessed a similar growth. The slow share price rise was due to concerns about the company’s management. Life Technologies Corp. (NASDAQ:LIFE) shares grew at 3.83 percent annually in the same period.

If Life Technologies Corp. (NASDAQ:LIFE) accepts either of the bids, it will be one of the largest acquisitions of the year. The company will call both parties to  the negotiation table after reviewing the offers. A deal could be announced as early as next week.

Life Technologies Corp. (NASDAQ:LIFE) came into existence after its predecessor Invitrogen Corp. merged with Applied Biosciences Inc. in a $6.7 billion deal. The company has over 5,000 patents, 10,000 employees and 50,000 products in the market. Its equipments are used in drug development, medical research, food and water safety and forensic studies.

Analysts have long criticized Life Technologies Corp (NASDAQ:LIFE)’s current management. They argue that the company has immense value, but it can be run much better by a different management. The company CEO Gregory Lucier has been criticized for not focusing on the company’s core products and services that contribute to about 85 percent of Life Technologies Corp (NASDAQ:LIFE)’s revenues.

In 2010, the company acquired Ion Torrent Systems Inc. for $725 million to add the next-generation sequencing product in its portfolio. The next generation sequencing machine market is expected to grow 60 percent by 2016 from $1.3 billion this year, but the Ion Torrent business remains unprofitable.

Life Technologies Corp. (NASDAQ:LIFE) already has support from other hedge funds. Glenview Capital Management LLC and John Paulson-led Paulson & Co. are among the biggest shareholders of the company.

Life Technologies Corp. (NASDAQ:LIFE) shares were up 0.63 percent to $67 at 10AM EDT.

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