Olink Holding AB acquired by Thermo Fisher Scientific: fairness opinion by J.P. Morgan and Goldman Sachs
Announced October 17, 2023 · Tender offer · All cash ·
SC 14D9 filed October 31, 2023
Diagnostics / Life Sciences Life Sciences
Enterprise value
$3.0B
EV / LTM EBITDA
591.4x
EBITDA $5.0M · 3% margin
EV / LTM revenue
14.79x
revenue $200M
DCF discount rate
10.5%–11.5%
Perpetuity growth
Deal terms
ConsiderationAll cash
Price per share$26.00
Premium74.4%
Premium basisClosing price per ADS of $14.91 on October 13, 2023 (two trading days before announcement)
StructureTender offer
Termination fee—
Reverse termination fee—
Go-shopNone
Outside date—
FilingSC 14D9 · EDGAR index
Implied value per share by method vs. $26.00 offer
Selected companies — FV / 2024E Revenue (J.P. Morgan) $8.83 – $16.53
Precedent transactions — FV / LTM Revenue (applied to projected revenue for twelve months ending 12/31/2023) (J.P. Morgan) $13.08 – $21.03
Discounted cash flow (J.P. Morgan) $20.74 – $26.46
Historical Trading Range (52-week, reference only) (J.P. Morgan) $14.10 – $26.47
Analyst Price Targets (reference only) (J.P. Morgan) $18.00 – $30.00
Precedent transactions — EV / LTM Revenue (as of June 30, 2023) (Goldman Sachs) $11.81 – $20.44
Discounted cash flow (Goldman Sachs) $18.76 – $24.36
Historical Stock Trading Analysis (Goldman Sachs) $14.10 – $26.47
Illustrative Present Value of Future Share Price Analysis (Goldman Sachs) $15.82 – $33.23
Premia Paid Analysis (Goldman Sachs) $16.95 – $22.87
Ranges as disclosed in the banker’s summary of analyses; the red line marks the per-share consideration.
Opinion of J.P. Morgan to the target board
Delivered October 17, 2023
Discounted cash flow assumptions
Discount rate10.5%–11.5%
BasisWeighted average cost of capital of Olink
Terminal valuePerpetuity growth
Perpetuity growth2.5%–3.5%
Exit multiple—
Projection period2024E-2033E
Projections usedOlink management projections (Management Projections)
Implied value per share$20.74–$26.46
Perpetual growth rate applied to terminal-year revenue; discounted to present value as of December 31, 2023; adjusted for estimated net debt as of December 31, 2023; fully diluted treasury stock method.
Selected public companies (3)
10x Genomics, Inc. · Quanterix Corporation · Cytek Biosciences, Inc.
| Multiple | Peer low | Peer median | Peer high | Range applied | Implied per share |
|---|---|---|---|---|---|
| FV / 2024E Revenue | — | — | — | 3.5x–7.0x | $8.83–$16.53 |
Selected precedent transactions (4)
| Date | Target | Acquirer | Multiple |
|---|---|---|---|
| 2023-08-28 | Abcam plc | Danaher Corporation | — |
| 2023-02-15 | Wyatt Technology | Waters Corporation | — |
| 2021-08-02 | Biovision, Inc. | Abcam plc | — |
| 2018-03-09 | Integrated DNA Technologies, Inc. | Danaher Corporation | — |
| Multiple | Low | Median | High | Range applied | Implied per share |
|---|---|---|---|---|---|
| FV / LTM Revenue (applied to projected revenue for twelve months ending 12/31/2023) | — | — | — | 7.5x–12.5x | $13.08–$21.03 |
Other analyses
| Analysis | Summary | Implied per share |
|---|---|---|
| Historical Trading Range (52-week, reference only) | Closing ADS price over the 52-week period ended October 13, 2023 ranged from an intraday low of $14.10 (October 3, 2023) to an intraday high of $26.47 (December 29, 2022). | $14.10–$26.47 |
| Analyst Price Targets (reference only) | Publicly available equity research analyst price targets for Olink as of October 13, 2023 ranged from $18.00 to $30.00 per share. | $18.00–$30.00 |
Engagement letter dated August 18, 2023; filing cross-references Item 5 for compensation details, amounts not stated in the sliced sections.
Opinion of Goldman Sachs to the target board
Delivered October 17, 2023 · Fee $11.0M ($8.0M contingent on closing), $3.0M on delivery of the opinion
Discounted cash flow assumptions
Discount rate11.0%–12.0%
BasisWeighted average cost of capital derived via CAPM
Terminal valuePerpetuity growth
Perpetuity growth3.5%–4.5%
Exit multiple—
Projection period2H2023E-2033E
Projections usedManagement Projections
Implied value per share$18.76–$24.36
Mid-year convention; discounted to present value as of June 30, 2023; net cash added; fully diluted treasury stock method.
Selected precedent transactions (8)
| Date | Target | Acquirer | Multiple |
|---|---|---|---|
| 2023-08 | Abcam plc | Danaher Corporation | 12.1x EV/LTM Revenue |
| 2023-02 | Wyatt Technology Corp. | Waters Corporation | 12.4x EV/LTM Revenue |
| 2022-01 | PeproTech, Inc. | Thermo Fisher Scientific Inc. | 18.5x EV/LTM Revenue |
| 2021-08 | BioVision Inc. | Abcam plc | 10.1x EV/LTM Revenue |
| 2019-11 | LGC Limited | Astorg Advisory LLC and Cinven Limited | 6.8x EV/LTM Revenue |
| 2019-07 | BioTek Instruments, Inc. | Agilent Technologies, Inc. | 6.5x EV/LTM Revenue |
| 2018-11 | Pacific Biosciences of California, Inc. | Illumina, Inc. | 13.8x EV/LTM Revenue (not completed) |
| 2018-03 | Integrated DNA Technologies, Inc. | Danaher Corporation | 7.7x EV/LTM Revenue |
| Multiple | Low | Median | High | Range applied | Implied per share |
|---|---|---|---|---|---|
| EV / LTM Revenue (as of June 30, 2023) | 6.5x | — | 18.5x | 11.1x–18.5x | $11.81–$20.44 |
Other analyses
| Analysis | Summary | Implied per share |
|---|---|---|
| Historical Stock Trading Analysis | $26.00 represented a 74.4% premium to the $14.91 closing ADS price on October 13, 2023; 75.7% premium to the 30-trading day VWAP of $14.80; 67.3% premium to the 60-trading day VWAP of $15.55; a 1.8% discount to the 52-week intraday high of $26.47; an 84.4% premium to the 52-week intraday low of $14.10; and a 7.1% discount to the median analyst price target of $28.00. | $14.10–$26.47 |
| Illustrative Present Value of Future Share Price Analysis | Applied EV/NTM Revenue multiples of 7.0x to 11.0x to estimated revenue for fiscal years 2024-2026 to derive implied year-end equity values for fiscal years 2023-2025, added year-end net cash, and discounted to October 13, 2023 at a 12.1% cost of equity. | $15.82–$33.23 |
| Premia Paid Analysis | Reviewed 294 all-cash acquisitions of U.S. public targets announced January 1, 2018 through October 13, 2023 with enterprise values of $1-10 billion: median premium 25.2%, average 56.7%, 25th percentile 13.7%, 75th percentile 53.4%. Applied a 13.7%-53.4% premium range to the undisturbed $14.91 ADS closing price. | $16.95–$22.87 |
Transaction fee of approximately $11 million, $3 million payable upon presentation to the Board of the results of its study enabling it to render its opinion, remainder contingent on consummation of the transaction.
3,000+ healthcare deal-level valuation multiples
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Management projections
| Projection year | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | CAGR |
|---|---|---|---|---|---|---|
| Revenue | $276M | $368M | $481M | $616M | $751M | 28.4% |
| Revenue growth | 38.0% | 33.3% | 30.7% | 28.1% | 21.9% | |
| EBITDA | $34.0M | $67.0M | $119M | $214M | $340M | 77.8% |
| EBITDA growth | 580.0% | 97.1% | 77.6% | 79.8% | 58.9% | |
| EBITDA margin | 12% | 18% | 25% | 35% | 45% | |
| Implied EV / EBITDA | 87.0x | 44.1x | 24.8x | 13.8x | 8.7x |
Year-1 growth is against LTM at announcement ($200M revenue, $5.0M EBITDA); later years are year over year.
Olink management prepared standalone Management Projections covering 2023E through 2033E (revenue, EBITDA post-SBC and unlevered free cash flow), provided to the Board, J.P. Morgan and Goldman Sachs. Revenue was projected to grow from $200 million in 2023E to $1,440 million in 2033E, with EBITDA (post-SBC) growing from $5 million to $572 million and unlevered free cash flow moving from $(25) million in 2023E to $377 million in 2033E. The unlevered free cash flow figures were not provided to Thermo Fisher or other prospective bidders.
Process notes
Two fairness opinions delivered to the Olink Board (J.P. Morgan and Goldman Sachs), both dated October 17, 2023; J.P. Morgan rendered its oral opinion October 16, 2023. Swedish-law tender offer with a 90% minimum tender condition enabling Compulsory Redemption. No termination fee payable by the Company or Summa in any circumstance, as the parties concluded such a fee would be impermissible under Swedish law. A Tender and Support Agreement with Summa and certain officers/directors (~66% of outstanding Common Shares) survives certain terminations until April 28, 2025 at a fixed $26.00 price, which the Board acknowledged would deter competing bidders. Competing bidder ('Party B') had indicated $22.00 per share but refused to submit a final proposal; Thermo Fisher raised its bid from $24.00 to $26.00. Goldman Sachs' opinion did not cover the Compulsory Redemption.
Other Diagnostics / Life Sciences fairness opinions
- Abcam / Danaher 2023 · 29.1x EV/EBITDA
- Chembio Diagnostics / Biosynex SA 2023
- Meridian Bioscience / SD Biosensor / SJL Partners 2022 · 17.6x EV/EBITDA
- Exact Sciences / Abbott 2025 · 44.2x EV/EBITDA
- Enzo Biochem / Battery Ventures 2025
- Akoya Biosciences / Quanterix 2025
All Diagnostics / Life Sciences opinions → · J.P. Morgan opinions · Goldman Sachs opinions