Roche reels in NimbleGen for $272.5 million

NimbleGen ditches IPO for cash acquisition

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MADISON, Wis.—Nearly three months to the day after NimbleGen Systems Inc. filed for an IPO, the company was more than happy to scrap those plans in lieu of an agreement to sell its business to Roche for $272.5 million. When the deal is closed—expected sometime late next month—both companies will have accomplished key strategic moves: Roche adds NimbleGen's line of high-density microarrays to an ever widening stable of genomic products and services; and Nimblegen gets a broad sales and service infrastructure faster than it would have by going public.

"At the time we filed our IPO, our intent was to use the cash in two main areas," says Stan Rose, president and CEO of NimblGen. "One was to continue to drive enhancing our underlying technology to get more information out of our microarrays, while looking at new applications for their use, and the other was to use it for a particular technology we have in targeted DNA sequencing."

Rose also concedes that by selling to Roche now, it has perhaps jumped forward a couple of years in terms of sales infrastructure, versus the time it would have taken, post-IPO, to build it internally.

Meanwhile, the deal by Roche comes on the heels of its March acquisition of 454 Life Sciences, as the company continues to show a strong interest—to the tune of more than $400 million dollars spent this year—in continuing to build out and broaden its reach in the genomics market.

"We believe in NimbleGen's technology, which has superior performance in many of the application fields they serve," says Manfred Baier, global head of Roche Applied Science. "They have a great team of competent researchers and we also feel that they will benefit from our global sales force."

That's not to say NimbleGen wasn't doing well enough on its own. According to Rose, total sales over the last three years tripled, from $4.5 million in 2004 to $13.5 million last year. Furthermore, by selling to Roche, NimbleGen has virtually assured that its operations here and its manufacturing facility in Reykjavik, Iceland will remain open and fully staffed.

"I think it was important that we saw a level of understanding and maturity from Roche management that when you are buying a company like NimbleGen, that much of the value of the asset is the people," says Rose. "It's not merely a matter of buying some intellectual property since those [buyouts] rarely work."

In terms of the products currently on the market, Baier says that NimbleGen's products and applications, which focus on DNA methylation and comparative genomic hybridization (CGH), were particularly attractive.

"These are both high-growth markets and ones that are not covered by any of our competitors," Baier notes.

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