SAN JOSE, Calif.—November 2, 2006—In just over a week, Genetix Group plc was forced to increase its offer price for Applied Imaging stock three times because of bids from third parties to acquire all outstanding securities. On October 23, the UK-based Genetix boosted its offer from $3.06 to $3.50 and then one week later, on October 30, it further boosted the offer to $3.70. Four days later, it was forced to raise the offer another dime to $3.80. A meeting of Applied Imaging shareholders to approve the acquisition is scheduled for November 21.
NEW MILTON, U.K.—Instrumentation specialist Genetix Group announced a definitive agreement to purchase San Jose, Calif.-based Applied Imaging (AI) for $18.3 million. Upon approval of AI stockholders, the deal will see Genetix pay $3.06 per share for all AI stock.
"Genetix's capabilities are very complementary to those of Applied Imaging," said Robin Stracey, AI president and CEO, in announcing the deal. "We are excited by the synergies and the prospects for enhanced competitiveness of the combined company. We believe this is the right path for our stockholders, our customers and our employees."
In acquiring AI, Genetix picks up a company with a large portfolio of automated imaging and image analysis systems that have been applied to everything from molecular marker identification via fluorescence in situ hybridization (FISH) to gross chromosomal analysis to detect diseases such as Down syndrome and some cancers. As such, the lines will effectively complement Genetix's current portfolio of automated cell biology, genomics and proteomics platforms.
Given the trend that she sees of ADMET and target selection moving toward cell-based testing, Shara Rosen, senior analyst with Kalorama Information, sees Genetix's decision to acquire AI as a smart move.
"Using cells that are the same as the target tissue appears to better mimic the action in the human body, resulting in better targeted drugs and more importantly, better targeted drugs faster and cheaper," she explains.
Among other benefits, the acquisition will give Genetix a stronger presence in the U.S. market. The company was unable to comment on the deal pending its final approval, but in a prepared statement, Genetix CEO Mark Reid said: "Joining together these two respected businesses focused on cell imaging and analysis will help us strengthen our position and exploit the growth opportunities in both the drug discovery and clinical diagnostics markets. We believe that the investment associated with this transaction will enhance shareholder value."
In a January 2005 report, Kalorama's Rosen determined that the 2004 global market for cell-based diagnostic technologies such as FISH and karyotyping was approximately $4 billion. Likewise, Frost & Sullivan analysts suggested in a 2005 report that the ADME market for Europe alone would reach $776 million by 2011.