Affymetrix and eBioscience Amend Definitive Merger Agreement
04 May 2012 - 12:00PM
Business Wire
Affymetrix, Inc., (NASDAQ:AFFX) and eBioscience, Inc., a
privately-held San Diego, CA-based company with an industry-leading
position in flow cytometry and immunoassay reagents for immunology
and oncology research and diagnostics, today announced they have
amended their existing definitive agreement dated November 29, 2011
under which Affymetrix will acquire eBioscience. Under the terms of
the amended agreement, Affymetrix will acquire eBioscience for $315
million in cash subject to usual adjustments. The transaction
remains subject to customary closing conditions and is now expected
to close late in the quarter ending June 30, 2012.
As previously announced, Affymetrix expects the acquisition of
eBioscience to:
- Create significant new commercial
opportunities in the key post-genomic applications of immunology,
oncology, cell biology, stem cell biology, and diagnostics
- Diversify the Company's revenues and
complement its genomics franchise
- Augment the Company's growing business
in diagnostics
- Expand the Company's product portfolio
to include multicolor flow cytometry reagents and a broad spectrum
of reagents for the analysis of cytokines, growth factors and other
soluble proteins
- Enhance the operational and new product
opportunities for Panomics RNA and protein analysis products
- Leverage the commercial capabilities of
both companies to generate new opportunities for growth
"The feedback from our customers, shareholders and partners has
been consistently positive since we announced our original
agreement with eBioscience last November," said Dr. Frank Witney,
president and chief executive officer of Affymetrix. "By amending
the transaction, we are now able to realize the benefits of
combining with eBioscience with significantly less senior secured
debt than under the original agreement. With eBioscience,
Affymetrix will expand its addressable markets by adding an
industry-leading portfolio of cell-based and immunoassays. These
new products are a critical part of our customers' workflow in our
key target markets of translational medicine, oncology, and
immunology. We believe that these markets represent a nearly $3
billion annual opportunity, which will put Affymetrix on a solid
path to sustained growth and profitability. We look forward to
welcoming the eBioscience team to the Affymetrix family."
The amended agreement contemplates funding the acquisition using
a combination of cash-on-hand, a senior secured financing of $75
million and additional financing options available to the Company.
The senior secured financing, which includes an additional $15
million revolving credit facility, is being provided by a group of
lenders led by administrative agent GE Healthcare Financial
Services Inc. and Silicon Valley Bank.
"We expect that adding eBioscience to Affymetrix will accelerate
our growth," said Tim Barabe, executive vice president and chief
financial officer of Affymetrix. "With 2011 revenues of $71
million, gross margins in excess of 70% and EBITDA margin of in
excess of 30%, eBioscience makes Affymetrix a much stronger
company, both operationally and financially. The revised purchase
price represents approximately 4.5 times 2011 revenue and 13.5
times 2011 EBITDA, and the transaction is expected to be accretive
to Affymetrix’s cash earnings per share."
As previously announced, Affymetrix, which is headquartered in
Santa Clara, expects to maintain eBioscience's management team and
operations in San Diego.
Houlihan Lokey, Inc. is acting as exclusive financial advisor to
Affymetrix and Davis Polk & Wardwell LLP is acting as legal
counsel to Affymetrix in the transaction. Jefferies & Company,
Inc. is acting as exclusive financial advisor to eBioscience and
DLA Piper LLP is acting as eBioscience's legal counsel in the
transaction.
Affymetrix's management team will host a conference call on May
4, 2012 at 5:30a.m. PT to discuss the amended transaction with
eBioscience. A live webcast can be accessed by visiting the
Investor Relations section of the Company's website at
http://www.affymetrix.com. In addition, investors and other
interested parties can listen by dialing domestic: (877) 407-8291,
international: (201) 689-8345.
A replay of this call will be available from 5:00 p.m. PT on May
4, 2012 until 8:00 p.m. PT on May 11, 2012 at the following
numbers: domestic: (877) 660-6853, international: (201) 612-7415.
The passcode for both replays is 394110. An archived webcast of the
conference call will be available under the Investor Relations
section of the Company's website.
About Affymetrix
Affymetrix technology is used by the world's top pharmaceutical,
diagnostic, and biotechnology companies, as well as leading
academic, government, and nonprofit research institutes. More than
2,200 systems have been shipped around the world and almost 25,000
peer-reviewed papers have been published using the technology.
Affymetrix is headquartered in Santa Clara, California, and has
manufacturing facilities in Cleveland, Ohio, and Singapore. The
Company has about 900 employees worldwide and maintains sales and
distribution operations across Europe, Asia and Latin America.
All statements in this press release that are not historical are
"forward-looking statements" within the meaning of Section 21E of
the Securities Exchange Act as amended, including statements
regarding Affymetrix' "expectations," "beliefs," "hopes,"
"intentions," "strategies" or the like. Such statements are subject
to risks and uncertainties that could cause actual results to
differ materially for Affymetrix from those projected, including,
but not limited to: risk relating to our ability to consummate the
acquisition of eBioscience under the terms of the amended
acquisition agreement and our ability to successfully integrate and
realize the anticipated benefits of the acquisition, risk relating
to the Company’s ability to successfully commercialize new
products, risk relating to past and future acquisitions, including
the ability of the Company to successfully integrate such
acquisitions into its existing business; risks of the Company's
ability to achieve and sustain higher levels of revenue, higher
gross margins and reduced operating expenses; uncertainties
relating to technological approaches, risks associated with
manufacturing and product development; personnel retention;
uncertainties relating to cost and pricing of Affymetrix products;
dependence on collaborative partners; uncertainties relating to
sole-source suppliers; uncertainties relating to FDA and other
regulatory approvals; competition; risks relating to intellectual
property of others and the uncertainties of patent protection and
litigation. These and other risk factors are discussed in
Affymetrix' Annual Report on Form 10-K for the year ended December
31, 2011, and other SEC reports. Affymetrix expressly disclaims any
obligation or undertaking to release publicly any updates or
revisions to any forward-looking statements contained herein to
reflect any change in Affymetrix' expectations with regard thereto
or any change in events, conditions or circumstances on which any
such statements are based.
This release shall not constitute an offer to sell or the
solicitation of an offer to buy any securities.
PLEASE NOTE:
Affymetrix, the Affymetrix logo, GeneChip, and all other
trademarks are the property of Affymetrix, Inc.
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