|WuXi CEO Ge Li|
WuXi PharmaTech's ($WX) CEO has teamed up with a major investor in an attempt to take the CRO private, pitching a buyout that would give the Chinese company's shareholders a 16.2% premium.
Ge Li and Ally Bridge Group Capital Partners are proposing to acquire all the WuXi shares they don't already own for $46 each, valuing the company at roughly $2.8 billion. ABG and Li, the company's chairman and co-founder, have submitted a nonbinding proposal letter to WuXi's board, which has promised to form a committee to evaluate the idea.
WuXi's share value immediately shot up 16.5% to $46 on Thursday morning, reflecting investor optimism that the deal will get done. Li and ABG didn't provide a rationale for taking the company private but touted the deal as "a very attractive opportunity to the company's shareholders."
Meanwhile, the CRO is trading at an all-time high value, riding a string of profitable quarters and acquisitions in genomics and manufacturing. Last year, WuXi grew revenue 16.6% to $674.3 million, driven by a 14.2% leap in its lab services business and a 23.8% increase in manufacturing dollars.
Earlier this year, WuXi paid $65 million for NextCODE, a spinoff of Icelandic genomics luminary deCODE, which Amgen ($AMGN) acquired for $415 million in 2012. The deal was part of WuXi's efforts to evolve into a value-adding partner for global R&D, not just a box-checking contractor, which has long been Li's ambition.
- read the announcement