Complete Genomics' ($GNOM) search for strategic alternatives announced in June has led to a $117.6 million buyout deal with DNA sequencing competitor BGI. China-based BGI plans to scoop up Mountain View, CA-based Complete for $3.15 per share in cash as part of a move that would expand the company's U.S. footprint.
As Reuters reports, the $3.15 price is an 18% premium on Complete Genomics' closing price Friday. Yet the companies point out that the price tag is 54% more than the closing price of Complete Genomics' stock prior to the company announcing its hunt for strategic alternatives. No matter how you do the math, there's no getting past the fact that Complete's stock closed Friday down 65% over the last 12 months.
Complete's struggles, which prompted the company to cut 20% of its workers in June, stem from competition in the DNA sequencing arena with the likes of larger players such as Illumina ($ILMN) and Life Technologies ($LIFE), Reuters reports. And new technologies from those companies and others have added pressure. Plus, the National Institutes of Health's budget constraints have hit labs in academia that have used Complete Genomics' sequencing services.
A BGI affiliate is offering Complete Genomics $30 million in bridge financing to support its operations after the buyout deal, which is expected to wrap up early next year. After the deal closes, BGI plans to keep Complete Genomics' operations alive in Mountain View.
Both BGI and Complete Genomics have faced "Big Data" challenges because of the complexity, rapid growth and massive scale of DNA data from next-generation sequencing. Complete in July announced a deal with Ingenuity Systems to provide Complete's customers with Ingenuity's software for analyzing genomic data. BGI unveiled a cloud-based software called EasyGenomics in April to aid in processing large amounts of genomic data and make the information more easily accessible to researchers.
- here's the release
- check out the Reuters article
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