Luminex Corporation and Nanosphere, Inc. announced that the companies have entered into a definitive agreement under which Luminex will acquire Nanosphere, a leader in the molecular microbiology and molecular diagnostic market for $1.35 per share in an all cash transaction valued at approximately $58 million.
With its focus on the molecular microbiology segment, Nanosphere delivers proprietary diagnostic tools that enable rapid and accurate detection of respiratory, gastroenteric and bloodstream infections. The Boards of Directors of both companies have unanimously approved the merger, which is expected to immediately accelerate total revenue growth.
Benefits of the Transaction:
An Ideal Strategic Fit: Nanosphere’s Verigene platform, broad menu, and strong presence in the molecular microbiology market with over 240 customers complement Luminex’s customer base. The combination will add a growing revenue stream and new platforms for growth.
Amplifies Luminex’s Market Leadership: Nanosphere’s Verigene technology leads in the high-growth bloodstream infection segment and complements Luminex’s current infectious disease portfolio. Following the acquisition, only Luminex will be able to offer customers automated molecular platforms for both syndromic and targeted molecular diagnostic testing (Verigene and ARIES).
Offers Attractive Economics and Shareholder Value: Nanosphere’s forecasted 2016 revenue of between $28-$30 million will immediately accelerate Luminex’s stand-alone projected revenue growth, reflecting Nanosphere’s high double digit revenue growth and the ability to leverage Luminex’s global molecular diagnostic distribution. Nanosphere’s total revenue for 2015 was $21 million. The Transaction is expected to be accretive to Luminex’s adjusted earnings by the end of 2017.
“The acquisition of Nanosphere will significantly enhance Luminex’s growth trajectory by expanding our product portfolio, delivering access to new markets and strengthening our pipeline of future products to make us the partner of choice for all molecular labs,” said Homi Shamir, president and CEO of Luminex. “The deal demonstrates prudent execution of our fourth strategic growth pillar — leveraging our financial strength to accelerate growth in our target markets.”
“Luminex will recognize significant strategic benefit moving forward as our customer base and leverage in our expanding menu contribute to accelerated revenue growth,” said Michael McGarrity, president and CEO of Nanosphere. “The resources and reputation for excellence that Luminex carries in the market will greatly benefit our customers and employees.”
Under the terms of the agreement, which has been approved by the boards of directors of both companies, a newly formed, wholly-owned subsidiary of Luminex will commence a tender offer for all outstanding shares of Nanosphere for $1.35 per share in cash. Luminex will fund the acquisition with cash on hand. Luminex intends to commence a tender offer for all of the shares of common stock of Nanosphere within 15 business days. Under the agreement, the tender offer will be followed by a merger to acquire any untendered shares. The tender offer is subject to the tender of a majority of Nanosphere’s common shares and certain other customary closing conditions. It is expected that the transaction will close in the second quarter of Luminex’s fiscal 2016.
Under the terms of the agreement, Luminex will pay approximately $58 million in cash to acquire Nanosphere, including payments in connection with outstanding common stock, preferred stock, and options and warrants of Nanosphere. Luminex will also pay or cause Nanosphere to pay off approximately $25 million in Nanosphere indebtedness outstanding as of March 31, 2016. Nanosphere generated approximately $21 million in revenue during 2015 and $6.6 million in its quarter ended March 31, 2016. As of March 31, 2016, Nanosphere had restricted and unrestricted cash of approximately $18.4 million. Assuming the transaction closes on or before July 1, 2016, Luminex expects the Nanosphere acquisition will add between $13 million and $16 million to 2016 consolidated revenue.
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