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In keeping with its expectation, Thermo Fisher Scientific (TMO - Analyst Report) completed the divestment of its Cole-Parmer customer channel business to private equity firm GTCR, LLC. The deal was announced in July under which GTCR agreed to purchase the Cole-Parmer business for $480 million.

Based in Illinois, Cole-Parmer was part of Thermo Fisher’s Laboratory Products and Services segment. This business provides fluid handling, test and measurement, and electrochemistry products and services and generated a significant $230 million in the last fiscal year.

Taking into account the expected synergies from this divestment, the company provided an updated annual guidance for 2014 during the second quarter earnings call. While it added an expected $80 million in volume ($45 million of which is organic) for this period, these increases are likely to be fully offset by a $90 million impact from the divestiture.

The Life technologies acquisition net of the divestitures including Cole-Parmer is expected to contribute about 26 percentage points to 2014 total revenue growth. Further, Thermo Fisher expects the deal to have a negative impact of 3 cents on the company’s 2014 adjusted earnings per share.

Following the colossal acquisition of Life Technologies, this latest move by Thermo Fisher remains consistent with its strategy to focus on its core segment. The company is currently emphasizing on research, Specialty Diagnostics and applied markets. In addition, the company is seeking to capitalize on growth opportunities in Asia Pacific and emerging markets.

In March this year, Thermo Fisher divested three of its business divisions to GE Healthcare, a unit of General Electric Co. (GE - Analyst Report), to comply with the closing conditions of the Life Technology acquisition. Per the deal, GE Healthcare bought Thermo Fisher’s gene modulation, cell culture and magnetic beads businesses for about $1.06 billion.

Thermo Fisher currently carries a Zacks Rank #3 (Hold).

Other Stocks to Consider

While we remain at the periphery regarding Thermo Fisher at the moment, investors interested in the medical instrument sector can consider stocks like Edwards Lifesciences Corp. (EW - Analyst Report) and Hologic Inc. (HOLX - Analyst Report). Both the stocks sport a Zacks Rank #2 (Buy).

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