By Lisa Kerner
Charlotte, N.C., June 12 - Invitrogen Corp. agreed to acquire Applera Corp.'s Applied Biosystems Group in a $6.7 billion stock and cash deal slated to close in the fall of 2008.
The strategic combination will result in a biotechnology reagents and systems company generating approximately $3.5 billion in combined sales, a joint news release stated.
Under the companies' definitive merger agreement, Applera-Applied Biosystems shareholders will receive $38.00 for each share of Applera-Applied Biosystems stock they own, with an expected split of 45% cash and 55% Invitrogen stock.
Invitrogen said the offer price is a 17% premium to Applera-Applied Biosystems' closing price on June 11 and a 12% premium to Applera-Applied Biosystems' average closing price in the last 30 trading days.
Applera-Applied Biosystems shareholders will have the option to request their merger consideration in all cash or all stock, subject to possible proration, the release said.
The total value per share will differ if Invitrogen's 20-day volume-weighted average price is above or below the range of $43.69 to $46.00 three business days prior to the close of the transaction.
To fund the cash portion of the consideration, Invitrogen said it will use cash on hand and proceeds from a fully underwritten debt financing from Bank of America, UBS Investment Bank and Morgan Stanley.
The transaction is subject to approval by Invitrogen and Applera-Applied Biosystems shareholders and satisfaction of customary closing conditions.
Invitrogen noted that the combination is expected to be neutral to slightly accretive to the company's earnings per share the first year after close and "significantly" accretive by the second year after close.
According to the release, the board of directors of the combined company will be composed of the nine current Invitrogen board members and three additional members from the current Applera board.
The combined company will be known as Applied Biosystems and will have its corporate headquarters in Carlsbad, Calif.
Invitrogen chairman and chief executive officer Gregory T. Lucier will become chairman and CEO of Applied Biosystems.
Mark P. Stevenson, president and chief operating officer of Applera-Applied Biosystems, will become the combined company's president and COO.
"With this acquisition, we are nearly doubling our consumables business as almost half of Applied Biosystems' revenues are consumable in nature," Lucier stated in the release.
"Combining Applied Biosystems' and Invitrogen's capabilities will realize growth opportunities greater and faster than either company could achieve independently," Stevenson added.
Moelis & Co. and UBS Investment Bank advised Invitrogen, while Applera was advised by Morgan Stanley.
Morgan Stanley and Greenhill & Co. provided fairness opinions to Applera's board of directors.
Located in Carlsbad, Calif., Invitrogen develops, manufactures and markets research tools in reagent, kit and applications forms for research, drug discovery and biological products manufacturers.
Applied Biosystems, one of two Applera operating groups, develops and markets instrument-based systems, consumables, software and services used to analyze nucleic acids, small molecules and proteins. The company is located in Norwalk, Conn.
| Acquirer: | Invitrogen Corp.
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| Target: | Applera Corp.'s Applied Biosystems Group
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| Announcement date: | June 12
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| Transaction total: | $6.7 billion
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| Price per share: | $38.00
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| Expected closing: | Fall 2008
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| Stock price of acquirer: | Nasdaq: IVGN: $43.35 on June 11
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| Stock price of target: | NYSE: ABI: $32.44 on June 11
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