Affymetrix ($AFFY), a maker of advanced genetic analysis technology, has rejected an unsolicited bid by former executives in favor of the $1.3 billion offer it received from Thermo Fisher Scientific ($TMO) earlier this year.
Origin Technologies, which was formed by former Affymetrix execs with the backing of SummitView Capital, a Chinese private equity firm focused on technology, upped its offer to about $1.58 billion last week. However, Affymetrix officials said they preferred the Thermo Fisher bid because they saw more risk in the Origin deal.
"The board found the risks to initiating and consummating a potential transaction with Origin outweighed the potential benefit," Affymetrix said in a press release. There was concern about Origin's ability to secure third-party financing in addition to obtaining necessary approvals by regulators in the U.S. and China.
Origin disagreed with Affymetrix's assessment but added that it was dropping its bid, The Wall Street Journal reported. Affymetrix shareholders are expected to vote Thursday on the Thermo Fisher deal.
Origin was formed by the former executives as a special-purpose financial entity to make a run at Affymetrix. The real bidder behind the deal, and Origin, was Centrillion Technology Holdings, a genetics analysis provider created by former Affymetrix employees.
Affymetrix specializes in faster analysis of genes using microarrays and would become part of Thermo Fisher's Life Science Solutions division upon closure of a deal. Affymetrix genetic analysis products are used in cytogenetics, genotyping and gene expression.
Thermo Fisher has said with the deal it expects synergies of $70 million over three years, consisting of $55 million in cost synergies and $15 million in revenue-related synergies. Affymetrix's offerings include diagnostics, antibodies, multiplex RNA and protein and single-cell assays.
Both companies aim to serve the R&D interests of biopharma players. Last year, Thermo Fisher launched the Ion S5 next-generation sequencing system to assist in clinical trials in which a quick, affordable snapshot of a panel of genes is needed.
- see the WSJ story (sub. req.)
- check out the Affymetrix release