Slimming down, then bulking up

An old-line firm reinvents itself as the top name in lab equipment

When Thermo Fisher Scientific Inc. chief executive Marijn Dekkers spoke at the JP Morgan investment conference in January, more than 1,000 investors and analysts jammed into an elegant hotel ballroom in San Francisco to hear him.

It wasn't always that way. When Dekkers joined Thermo in 2000 - it was then called Thermo Electron - the Waltham company was a dysfunctional technology conglomerate with a confusing octopus of subsidiaries and sputtering profits. But Dekkers helped streamline the firm's corporate structure and narrow its focuses to life sciences. Revenues, profits, and stock price have risen steadily.

Then a $10.6 billion merger with Fisher Scientific in late 2006 tripled the company's size and transformed it into the world's largest supplier of laboratory equipment - providing everything from mass spectrometers to pipettes to chemicals. The company now has close to $10 billion in annual revenue, 350,000 customers, and 33,000 employees — including 1,600 in Massachusetts.

"If you walk into any laboratory — it doesn't matter what it is — you'll see lots of our equipment," says Dekkers, a former scientist who has run Thermo for six years.

Last year, revenue nearly tripled to $9.7 billion because of the merger, compared with 2006. And profit more than quadrupled to $761 million because of the company's bigger scale. But even a full year after the merger, sales have continued to climb. Revenue rose 9 percent in the first quarter of this year, aided by the weaker dollar, additional smaller acquisitions, and continued growth in demand for research tools, despite a slowdown in some other parts of the economy. "We're not experiencing a recession," Dekkers says.

According to conventional wisdom, some mergers fail for a variety of reasons. Sometimes companies overpay. Cultures sometimes clash. But analysts say the Thermo-Fisher merger hasn't run into significant problems.

"The integration has gone very smoothly," says John Sullivan, director of research at investment bank Leerink, Swann & Co.

Todd Wallack can be reached at twallack@globe.com.