Laboratory Corporation of America Holdings ($LH), a global diagnostics company, will buy prenatal testmaker Sequenom ($SQNM) for $371 million in cash.
Under terms of the agreement, LabCorp will acquire all of Sequenom in a cash tender offer for $2.40 per share, or an equity value of $302 million, the company said. That represents a total enterprise value of approximately $371 million, which includes net indebtedness.
The transaction, which is subject to customary closing conditions and shareholder approval, will be done through an acquisition subsidiary, Savoy Acquisition, setup by LabCorp. The deal is expected to be completed by the end of the year, the company said.
"This is exactly the kind of strategic acquisition that LabCorp seeks,” David King, chairman and CEO of LabCorp, said in a statement. “Sequenom's proven best-in-class technology and strong research complement LabCorp's extensive women's health offering, providing patients and physicians with one source for the most complete range of testing options in women's health, including NIPT (noninvasive prenatal testing) and reproductive genetics.”
Following a change in leadership last September, Sequenom announced it reached a deal with UnitedHealthcare ($UNH) to offer its carrier screening tests to the insurer's 43 million covered lives. The deal was seen as a big boost for its business, as the contract brought the number of covered lives under Sequenom's diagnostic services to more than 200 million.
LabCorp focuses on diagnostic solutions, getting new medicines to patients faster and developing technology solutions. The company reported net revenue of more than $8.5 billion in 2015.
JP Morgan is acting as financial adviser to Sequenom for the transaction, and Cooley is providing legal advice. Barclays is acting as financial adviser to LabCorp, and Hogan Lovells is providing legal advice.
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