US-based Thermo Fisher Scientific has entered a definitive agreement to divest its anatomical pathology business to Japanese healthcare firm PHC Holdings for a cash consideration of $1.14bn.

Part of Thermo Fisher’s Specialty Diagnostics division, the anatomical pathology business offers microscope slides, instruments and consumables.

Its portfolio includes laboratory equipment and consumables for cytology and histology testing, rabbit monoclonal antibodies, digital pathology products, and other pathology instruments.

“Part of Thermo Fisher’s Specialty Diagnostics division, the anatomical pathology business offers microscope slides, instruments and consumables.”

The business operates with 1,200 employees across the US, Europe and China. It contributes about $350m to Thermo Fisher’s annual revenue.

PHC Holdings provides value-added products and services for diabetes care, diagnostics, life sciences and healthcare IT. The acquisition is expected to boost the firm’s diagnostics and healthcare portfolio.

PHC Holdings CEO Hidehito Kotani said: “We are pleased to have signed the agreement with Thermo Fisher Scientific. Their anatomical pathology business has shown steady growth with their strong customer base in global hospital markets, especially in the US.

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“This is a solid business with good growth potential and we believe it will create value for our stakeholders as part of our growing diagnostics and healthcare portfolio.”

Subject to customary closing conditions and regulatory approvals, the transaction is set to complete in the second quarter of this year.

Thermo Fisher expects the sale to result in a dilution of around $0.10 to adjusted earnings per share in 2019. The company generates revenues of more than $20bn annually.

It primarily focuses on improving patient diagnostics, driving life science research, delivering medicines to market and boosting laboratory productivity.

The company’s products are available under the brands Thermo Scientific, Applied Biosystems, Invitrogen, Fisher Scientific and Unity Lab Services.

The PHC Holdings Corporation changed its name from Panasonic Healthcare Holdings in April 2018. PHC Holdings Corporation groups had consolidated net sales in FY2017 of JPY192.6bn with the global distribution of products and services in more than 125 countries.

Additional reporting by Charlotte Edwards.