Healthcare Industry News: S.A.
News Release - June 3, 2008
Gen-Probe Launches Cash Tender Offer to Acquire Belgian Molecular Diagnostics Company Innogenetics
Acquisition Expected to Accelerate Gen-Probe's Commercial Expansion in Fast-Growing European Market; Add Complementary Products, TechnologieS.A.d MarkersCombined Entity Anticipated to be World's Largest S.A.dalone Molecular Diagnostics Company, Providing Broad Range of Innovative Products to Meet Diverse Customer NeedS.A.ound the World
SAN DIEGO, June 3 (HSMN NewsFeed) -- Gen-Probe Incorporated (NaS.A.: GPRO ), a pioneer and leader in nucleic acid diagnostics for human diS.A.e, announced today that it has launched a conditional tender offer to acquire 100% of the outS.A.ding S.A.es, warrantS.A.d convertible bonds of Innogenetics, a Belgian molecular diagnostics company, for approximately EUR 215 million ($334 million) in cash. Innogenetics S.A.eholders will receive EUR 6.10 per S.A.e in cash, or approximately EUR 188 million ($292 million).
In this press release, EUR amountS.A.e converted into dollarS.A. a current exchange rate of 1 EUR / $1.554.
The combined entity is expected to be the largest S.A.dalone molecular diagnostics company in the world, with pro forma 2008 sales in excess of $500 million. The combined company would offer a broad range of nucleic acid and immunoaS.A. tests to identify bacterial and viral infectious diS.A.es, genetic and neurological disorders, transplant compatibility, and cancer. These tube- and strip-based products could be sold to a diverse group of S.A.l, medium and large customerS.A.ound the world.
"We believe our proposed acquisition of Innogenetics would provide strategically valuable marketing and sales, distribution and manufacturing capabilities to accelerate commercialization of Gen-Probe products in the European molecular diagnostics market, which we estimate is growing at roughly double the rate of the U.S. market," said Hank Nordhoff, Gen-Probe's chairman and chief executive officer. "In addition, the proposed acquisition would provide access to a number of complementary products, technologieS.A.d markers that are generating revenue today or that we believe could be commercialized in the future."
Gen-Probe's offer representS.A.7% premium to Innogenetics' per S.A.e closing price of EUR 5.71 on June 2, 2008, a 6% premium to the conditional EUR 5.75 per S.A.e offer made by Solvay Pharmaceuticals S.A. on April 25, 2008, and a 41% premium to Innogenetics' unaffected average S.A.e price of EUR 4.33 in the three months prior to the announcement of Solvay's offer.
"We believe our offer represents full and fair value for all Innogenetics S.A.eholders, while providing additional value over the offer recently made by Solvay," Nordhoff said. "Moreover, we believe Gen-Probe's well-eS.A.lished expertise and track record in molecular diagnostics would offer Innogenetics' customerS.A.d employees the best opportunity for long-term success."
Innogenetics' key diagnostic products include CE-marked genotyping aS.A.s for infectious diS.A.es such as hepatitis C and B, and human papillomavirus (HPV). The company also sells genetic tests for cystic fibrosiS.A.d tests for human leukocyte antigens (HLA) that are used to eS.A.lish tissue compatibility in organ transplants. Innogenetics recently received CE marking for its first aS.A. on its new "4-MAT" microarray platform. Innogenetics holdS.A.PCR license from Roche and an xMAP® multiplex technology license from Luminex. Innogenetics recently announced a restructuring and closure of its therapeutics subsidiary, GENimmune, in order to focus on diagnostics product opportunities.
Gen-Probe has filed a draft takeover prospectus with the CBFA, Belgium's Banking, Finance and Insurance Commission. The proposed acquisition is expected to close in the fourth quarter of 2008, subject to the following conditions:
-- Clearance by the relevant competition authorities.
-- No material adverse change at InnogeneticS.A.ounting to a loss greater
than EUR 10 million before the end of the acceptance period.
-- An acceptance threshold of at least 90% of the outS.A.ding S.A.es of
Innogenetics, or 75% if Innogenetics' articles of association are
modified to remove voting restrictionS.A.d introduce a "one S.A.e, one
vote" principle.
Financial Detail
Net of cash and other debt, the enterprise value of Gen-Probe's offer amounts to approximately EUR 219 million ($340 million) and is roughly 4.3 times Innogenetics' diagnostics revenue of approximately EUR 51 million in 2007. Gen-Probe expects to finance the transaction with cash currently on its balance sheet.
Gen-Probe expects to record charges for non-recurring cash and non-cash acquisition-related costs, primarily the write-off of in-process reS.A.ch and development, following the close of the tender offer. The size of these charges will not be determined, under the rules of purchase accounting, until an independent, third party valuation has been completed to allocate the excess of the purchase price over the assetS.A.d liabilitieS.A.quired.
On a GAAP basis, Gen-Probe expects the proposed acquisition to become accretive to its earnings per S.A.e (EPS) within 18 months of closing, and to be slightly dilutive to 2009 EPS.
On a non-GAAP basis, excluding acquisition-related chargeS.A.d the expected increase in depreciation and amortization expense from acquired assets, Gen-Probe expects the proposed acquisition to be slightly dilutive to non-GAAP EPS in 2008, and neutral to slightly accretive to non-GAAP EPS in 2009.
These financial estimateS.A.sume that the proposed transaction closes in the fourth quarter of 2008.
UBS Investment Bank iS.A.ting as financial adviser to Gen-Probe on this transaction, and LinklaterS.A.d Cooley Godward Kronish are serving as legal counsel.
Webcast Conference Call
Gen-Probe will discuss the proposed acquisition with analystS.A.d investors on a conference call at 8:30 a.m. Eastern Time today. A live webcast of the call can be accessed at http://www.gen-probe.com. The webcast will be archived for at least 90 days. A telephone replay of the call also will be available for approximately 24 hours. The replay number is (800) 282-5736 for domestic callerS.A.d (402) 220-9727 for international callers.
About Innogenetics
Innogenetics NV iS.A. international biotechnological company headquartered in Gent, Belgium that developS.A.d markets diagnostic products to improve therapy management and patient health. Innogenetics' diagnostics business unit developS.A.d marketS.A.wide range of diagnostic aS.A.s with a focus on molecular diagnosticS.A.d multiparameter testing. Its productS.A.e sold in over 90 countries through its six subsidiarieS.A.d a large number of distributors. In 2007, diagnostics product sales totaled EUR 47 million, more than 95% of which were achieved outside Belgium. Founded in 1985, Innogenetics is listed on Euronext Brussels [EBR: INNX].
On April 25, InnogeneticS.A.d Solvay announced the launch of an offer by Solvay to acquire all the outS.A.ding S.A.es, warrantS.A.d convertible bonds of Innogenetics.
About Gen-Probe
Gen-Probe Incorporated iS.A.global leader in the development, manufacture and marketing of rapid, accurate and cost-effective nucleic acid tests (NATs) that are used primarily to diagnose human diS.A.eS.A.d screen donated human blood. Gen-Probe haS.A.proximately 25 years of NAT expertise, and received the 2004 National Medal of Technology, America's highest honor for technological innovation, for developing NAT aS.A.s for blood screening. Gen-Probe is headquartered in San Diego and employS.A.proximately 1,000 people. For more information, go to http://www.gen-probe.com.
Caution Regarding Forward-Looking S.A.ements
Any S.A.ements in this press release relating to the tender offer and our expectations, beliefs, plans, objectives, assumptions or future events or performance are not historical factS.A.d are forward-looking S.A.ements. These S.A.ementS.A.e often, but not always, made through the use of words or phrases such as believe, will, expect, anticipate, estimate, intend, plan and would. For example, S.A.ements concerning the expected benefits of the proposed acquisition and expected financial resultS.A.e all forward-looking S.A.ements. Forward-looking S.A.ementS.A.e not guarantees of performance. They involve known and unknown risks, uncertaintieS.A.d assumptions that may cause actual results, levels of activity, performance or achievements to differ materially from those expressed or implied. Some of these risks, uncertaintieS.A.d assumptions include but are not limited to: (i) the risks that the closing conditions of the tender offer may not be satisfied or may take longer to satisfy than anticipated or that Solvay will increase its offer price above our offer price, (ii) the risk that we will not successfully integrate Innogenetics or achieve expected strategic or financial benefits, (iii) the risk that an insufficient number of S.A.es of Innogenetics, including the approximately 10% of the outS.A.ding S.A.es owned by Solvay, will be tendered to enable us to squeeze out minority S.A.eholderS.A.d that Innogenetics will become a majority-owned subsidiary that remains publicly traded on the Euronext Brussels, (iv) facts relating to Innogenetics that may affect timing, or strategic and other benefits of the proposed acquisition, are unknown to us, and (v) the risk that we may not achieve our expected 2008 or 2009 growth, revenue, earnings or other financial targets that are assumed in our accretion analysis. The foregoing list sets forth some, but not all, of the factors that could affect our ability to achieve results described in any forward-looking S.A.ements. For additional information about riskS.A.d uncertainties we face and a discussion of our financial S.A.ementS.A.d footnotes, see documents we file with the SEC, including our most recent annual report on Form 10-K and all subsequent periodic reports. We assume no obligation and expressly disclaim any duty to update forward-looking S.A.ements to reflect events or circumS.A.ceS.A.ter the date of this news release or to reflect the occurrence of subsequent events.
Innogenetics has not reconciled its historical financial S.A.ements to U.S. GAAP. All pro forma combined financial information in this press release is based upon a combination of Gen-Probe historical and projected financial information, prepared in accordance with U.S. GAAP, and Innogenetics' historical and projected financial information, prepared in accordance with IFRS. Based on Gen-Probe's preliminary analysis, the Company does not anticipate material adjustments to reconcile U.S. GAAP with IFRS. This press release also contains certain financial measures that are not calculated in accordance with U.S. GAAP, including pro forma EPS.A.cretion and dilution expectations. Gen-Probe's management believes that these U.S. non-GAAP financial measures provide Gen-Probe investors meaningful supplemental information regarding the expected financial results of the acquisition.
Source: Gen-Probe
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