BofA sees acquisition of Solventum’s P&F biz as ‘nice deal’ for Thermo Fisher

BofA notes that Thermo Fisher (TMO) announced that it has entered into a definitive agreement with Solventum (SOLV) to acquire their Purification & Filtration business for approximately $4.1B in cash. The firm sees this deal as “a nice smaller deal” that Thermo Fisher can squeeze. Solventum’s P&F business currently seems to be somewhat of a mismanaged asset as it is one of its lowest margin businesses and one of its most capital-intensive. While this “isn’t necessarily a huge home run or incredibly splashy,” BofA doesn’t see anything fundamentally wrong with the P&F business and believes that Thermo Fisher will be able to run it better than it currently is being managed under Solventum. This “perfectly fine tuck-in” creates some nice incremental opportunity/accelerated revenue growth for Buy-rated Thermo Fisher and leaves them with a lot of firepower left to use, the firm adds.