January 18, 2013 / 2:00 PM / 5 years ago

Life Tech exploring potential sale, shares soar

NEW YORK (Reuters) - Life Technologies Corp (LIFE.O) is exploring a potential sale and has retained banks to advise on the process, the biotechnology company said on Friday, sending its shares more than 10 percent higher to an all-time record.

Life Technologies, whose market value surged to roughly $10.5 billion, said its board has hired Deutsche Bank Securities (DBKGn.DE) and Moelis & Company to assist in its “annual strategic review.”

The Carlsbad, California-based company, which makes genetic testing equipment and products used in biotechnology development, has drawn initial interest from several large private equity firms, people familiar with the matter said.

Buyout firms Blackstone Group LP (BX.N), Bain Capital LLC and TPG Capital LP are among the several interested parties, said the people, who asked not to be named as details of the auction are not public. Life Technologies said its board of directors has not decided on any specific course of action.

Given the sheer size of a potential leveraged buyout, private equity firms are expected to team up as the sale process advances, the people said, adding that the auction is still at an early stage and bidders have yet to conduct due diligence.

Representatives of Blackstone were not immediately available for comment, while TPG and Bain declined to comment.

News of the potential sale adds to expectations that robust debt financing markets could lead to a return of the mega leveraged buyouts, which have remained elusive since the 2008 financial crisis.

In another potential deal that would mark the largest private equity deal since the global financial crisis, buyout firm Silver Lake Partners is in discussions to take Dell Inc DELL.O private, people familiar with the matter have said.

Gene-sequencing companies such as Life Technologies have become takeover targets over the last year by potential buyers seeking to acquire the technology that can be used to analyze a person’s DNA and help provide personalized medicine.

    Last year, Roche Holding AG ROG.VX made a hostile attempt, unsuccessfully, to buy San Diego-based gene sequencing company Illumina Inc (ILMN.O). Shares of Illumina fell 1 percent to $51.03 on Friday, valuing the company at nearly $6.4 billion.

    Shares of Life Technologies rose 10.6 percent to $60.79 on the Nasdaq stock market, after reaching an all-time high of $62 during the session.

    Canadian newspaper Financial Post, which earlier reported the sale process, said a potential deal for Life Technologies could come in the $65-$75 per share range.

    “While price talk is reported to be in the $65 to $75 range, our initial analysis suggests an LBO transaction valuing Life’s equity in the $50 to $60 range is at present more realistic,” Jefferies & Co analyst Jon Wood said in a note.

    While the company’s strong revenue, scalable operating model and capital efficiency may support a higher sale price, buyers had less appetite for risk following the 2008 financial crisis, Wood added.

    Reporting by Soyoung Kim in New York, additional reporting by Esha Dey in Bangalore,; Editing by Saumyadeb Chakrabarty, M.D. Golan, Gunna Dickson and David Gregorio

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