By Lisa Kerner
Charlotte, N.C., June 4 - Qiagen NV agreed to acquire Digene Corp. in a cash and stock transaction valued at $1.6 billion and slated to close in August or September.
Under the agreement, Digene shareholders may elect to receive $61.25 in cash or 3.545 shares of Qiagen stock for each Digene share. The per-share price of $61.25 is a 37% premium to the June 1 closing stock price of $44.77.
The agreement includes a $59 million termination fee payable to Digene.
Qiagen shareholders will own about 78% of the combined company, and Digene shareholders will own the remaining 22%.
Both companies' boards of directors approved the deal, which will combine Qiagen's portfolio of sample and assay technologies with Digene's molecular diagnostic testing. The combined company is expected to generate molecular diagnostics revenues of $350 million and total revenues of more than $800 million in 2008, a company news release stated.
"This transaction creates significant value for our shareholders and instantaneous market and technology leadership in what is one of the most exciting areas of life sciences and healthcare: molecular diagnostics," Qiagen chief executive officer Peer M. Schatz said in the release.
"The joint franchises link virology with oncology, thereby creating an exceptional platform to add next-generation and high-value molecular diagnostic products and strategically position the company for future growth," Schatz added.
Qiagen expects the transaction to contribute revenues of between $58 million and $60 million in the fourth quarter of 2007 and $260 million to $270 million for the full year 2008.
"We are pleased to be able to build on the successful partnership we have had with Qiagen for more than a decade," Digene president and chief executive officer Daryl J. Faulkner stated. "We have collaborated on various projects, such as our current Rapid Capture System, which Qiagen co-developed and manufactures. By accelerating this existing and productive working relationship, we anticipate future growth opportunities and have already begun to develop new products."
The combined company, known as Qiagen, will be based in Maryland. Schatz will continue to lead Qiagen as CEO, and Roland Sackers will remain as the company's chief financial officer. Faulkner will be co-head of the integration steering committee.
Qiagen was advised by Goldman, Sachs & Co.; Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, PC; De Brauw Blackstone Westbroek; and Freshfields Bruckhaus Deringer.
JPMorgan and Ballard, Spahr, Andrews & Ingersoll, LLP advised Digene.
Digene develops proprietary DNA and RNA testing systems in Gaithersburg, Md.
Qiagen is a biotechnology company based in Venlo, the Netherlands.
| Acquirer: | Qiagen NV
|
| Target: | Digene Corp.
|
| Price per share: | $61.25 in cash or 3.545 shares of Qiagen stock
|
| Announcement date: | June 4
|
| Termination fee: | $59 million
|
| Expected closing: | August or September
|
| Stock price for acquirer: | Nasdaq: QGEN: $17.28 on June 1
|
| Stock price for target: | Nasdaq: DIGE: $44.77 on June 1
|
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