Affymetrix and eBioscience Amend Definitive Merger Agreement

SANTA CLARA, Calif.--(BUSINESS WIRE)--May 4, 2012 - 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.

 

Contact: Affymetrix, Inc.
Doug Farrell, 408-731-5285
Vice President of Investor Relations

 

 

Posted: May 2012


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