Laboratory supplies giant Thermo Fisher Scientific announced plans to buy contract development and manufacturing organization (CDMO) Patheon for $35.00 per share in cash. The transaction totals approximately $7.2 billion, which includes the assumption of approximately $2 billion of net debt and is expected to be completed by the end of 2017.

As the laboratory supply sector continues to consolidate, the larger providers are seeking to provide more comprehensive services. This deal, agreed by both firms’ boards, gives Thermo Fisher a ready-made platform in the rapidly-growing area of contract development and manufacturing, to go alongside its existing laboratory products and services business. Thermo expects to be able to save $90 million in costs after three years.

Patheon has a network of facilities, primarily in North America and Europe, and approximately 9.000 professionals worldwide. In 2016, the company generated approximately $1.9 billion in revenue and will become part of Thermo Fisher's Laboratory Products and Services Segment, the companies said in a press release about the acquisition.