September 17, 2012 / 3:05 PM / 7 years ago

Chinese co to buy Complete Genomics for $117.6 million

(Reuters) - Complete Genomics Inc (GNOM.O) said it would be bought by China’s BGI-Shenzhen for $117.6 million, three months after the gene sequencing company started a strategic review.

Shares of the company rose 16 percent to $3.09 in morning trade, a little below the $3.15 per share offer, which represents a premium of 18 percent to the stock’s Friday close.

Intense competition from bigger players like Life Technologies Corp (LIFE.O) and Illumina Inc (ILMN.O) and a cut in funding by the National Institutes of Health for basic science research have hurt smaller gene sequencing companies like Complete Genomics and Pacific Biosciences (PACB.O).

Mountain View, California-based Complete Genomics had in June said it was exploring strategic options, including a sale, and would cut about 20 percent of its workforce.

“The transaction will expand BGI’s U.S. presence and provide (it ) access to Complete Genomics’s Long Fragment Read (LFR) technology,” Robert W Baird & Co Inc analyst Jeffrey Elliott wrote in a note to clients.

Complete Genomics unveiled its LFR technology, which is expected to improve accuracy and reduce the amount of DNA needed for testing, in July.

Elliott said he did not expect a better offer given “the closing window of opportunity before Complete Genomics runs out of cash.”

The company, which provides whole human genome sequencing, ended its June quarter with $43.3 million in cash, cash equivalents and short-term investments.

Complete Genomics, which will continue as a separate company, will receive an additional up to $30 million in bridge financing for its operations following the deal.

The deal with BGI-Shenzhen, which operates non-profit genomic research institutes and sequencing application commercial units, is expected to close in early 2013.

Complete Genomics shares, which have gained about 31 percent of their value since announcing the strategic review, was one of the top percentage gainers on Nasdaq on Monday.

Reporting By Vrinda Manocha, additional reporting by Balaji Sridharan in Bangalore; Editing by Sriraj Kalluvila

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below