Affymetrix Closes eBioscience Deal - Analyst Blog
26 June 2012 - 10:45PM
Zacks
On June 25, genetic products maker
Affymetrix Inc (AFFX) completed its acquisition of
eBioscience Holding Company, Inc. for $315 million in cash. The
payment was partly financed through available cash resources and
partly by a public offering of senior notes. eBioscience is now a
fully-owned subsidiary of Affymetrix.
Also, Affymetrix’s Compensation
Committee agreed to issue about 1.32 million shares from its common
stock as equity incentive awards to encourage 278 eBioscience
employees to join the company.
San Diego, California-based
eBioscience has been a global leader in immunology and oncology
flow cytometry reagents offering a vast selection of antibodies,
enzyme-linked immunosorbent assays (“ELISAs”) and proteins for life
science research and diagnostics. eBioscience has also been an
industry leader in flow cytometry (a technique for analysing
microscopic particles) and immunoassay reagents for immunology and
oncology research and diagnostics.
The acquisition is expected to
significantly boost Affymetrix’s foothold in the fast-growing
immunology, oncology and translational medicine markets,
representing an annual opportunity of more than $2.5 billion. It
will diversify the company’s revenue base, expand its product range
(to include a vast array of reagents) and reinforce its growing
molecular diagnostics business.
Management believes that the merger
will increase the company’s operating income and gross margin in
fiscal 2012. Besides expanding its global reach, Affymetrix aims to
exploit cross-selling opportunities and invest in research and
development (“R&D”) to develop new products using eBioscience’s
technology.
Affymetrix is a leading provider of
microarray-based products and services to the global research
community. Along with Illumina Inc. (ILMN), it is
one of the two major providers of microarray technologies,
primarily used in the field of genetic research.
The company, however, needs to
successfully integrate its acquisitions so that they do not turn
out to be a waste. Affymetrix is operating in an intensely
competitive industry and faces risks associated with lower R&D
spending by its customers due to a soft economy and government
actions including budget cuts.
AFFYMETRIX INC (AFFX): Free Stock Analysis Report
ILLUMINA INC (ILMN): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
Affymetrix (NASDAQ:AFFX)
Historical Stock Chart
From Sep 2024 to Oct 2024
Affymetrix (NASDAQ:AFFX)
Historical Stock Chart
From Oct 2023 to Oct 2024