Shares of Olink Holding AB(NASDAQ: OLK) are skyrocketing 66.1% higher as of 11 a.m. ET on Tuesday. The huge jump came after Thermo Fisher Scientific(NYSE: TMO) announced plans to acquire Olink for roughly $3.1 billion in an all-cash transaction.
Thermo Fisher's offer price of $26 per share represents a premium of around 74% above the closing price of Olink's American Depositary Shares on Oct. 16, 2023. Olink's largest shareholder, Summa Equity AB, plus other shareholders who together own more than 63% of Olink's common shares, have already agreed to tender their shares to Thermo Fisher.
Why Thermo Fisher Scientific is acquiring Olink
Thermo Fisher Scientific ranks as one of the biggest life sciences companies in the world. It continually looks for business development opportunities to enhance its market reach. Olink appears to be a good fit.
Olink is a leader in the area of proteomics -- the study of proteins. The company's Proximity Extension Array allows researchers to conduct high-throughput analysis of proteins. This technology has been featured in more than 1,400 scientific publications.
Thermo Fisher CEO Marc Casper stated in the press release announcing the acquisition, "Olink's proven and transformative innovation is highly complementary to our leading mass spectrometry and life science platform." He added, "Our company is uniquely positioned to bring this technology to customers enabling them to meaningfully accelerate discovery and scientific breakthroughs."
It also helps that Olink could generate more than $200 million in revenue in 2024. Thermo Fisher expects the transaction to be accretive to adjusted earnings by $0.10 per share in the first full year of ownership, excluding financing costs and noncash deal-related equity compensation costs.
What Olink investors should do now
Olink shareholders could hold on to their shares. If they do, they could add to their profits, since the price of the life sciences stock is still more than 4% below Thermo Fisher's offer price.
However, it will probably take until mid-2024 for the transaction to close. Selling Olink shares now and reinvesting the proceeds could make investors even more money than waiting until the acquisition is finalized.
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Keith Speights has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Thermo Fisher Scientific. The Motley Fool has a disclosure policy.
