Biotechnology giant Invitrogen plans to acquire peer Applied Biosystems for $6.7 billion

12 June 2008

Medical research company Invitrogen Corp. said early today that it plans to buy fellow life sciences toolmaker Applied Biosystems Group to $6.7 billion, or $38 a share, in cash and stock. Invitrogen said the newly combined company, to be called Applied Biosystems, should generate about $3.5 billion in sales annually.
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Applied Biosystems is one of two publicly traded units of Applera Corp. The other, Celera Genomics Group, is best known for sequencing the human genome independent of the government's effort under the leadership of Craig Venter.

Under the terms of the merger agreement, Applera-Applied Biosystems shareholders will receive $38.00 for each share of Applera-Applied Biosystems stock they own in the form of Invitrogen common stock and cash. The expected split between cash and stock is 45 per cent and 55 per cent, respectively.

Applera-Applied Biosystems shareholders will receive a value of $38.00 a share if the 20 day volume-weighted average price of Invitrogen common stock is in the range of $43.69 - $46.00 three business days prior to the close of the transaction. The total value per share will differ if Invitrogen's 20-day volume-weighted average price is above or below that range, measured shortly prior to the close of the transaction.

The consideration represents a premium of 17 per cent to Applied Biosystems's closing price on 11 June 2008, or 12 per cent to its average closing price in the last 30 trading days. Applera-Applied Biosystems shareholders also will have the option to request all cash or all stock. Upon completion of the transaction, Invitrogen shareholders will own the majority of the company.

The companies expect the acquired entity to be neutral to slightly accretive to Invitrogen's earnings per share the first year after close and significantly accretive in year two. Following the closing of the transaction, the new board of directors will be composed of the nine current Invitrogen board members and three additional members from the current Applera Board. Gregory T Lucier will continue to be chairman and CEO of the combined company, and Mark P Stevenson will remain president and COO.

''This transaction combines the industry's premier consumables provider with the industry's premier systems provider to create a world-class biotechnology tools company,'' said Lucier. ''With this acquisition, we are nearly doubling our consumables business as almost half of Applied Biosystems's revenues are consumable in nature. It also provides significant value creating opportunities for customers, shareholders and employees alike.''