Nasdaq-listed Illumina has signed on the dotted line to pick up the remaining 85.5 per cent stake it does not already own in Grail, a California-headquartered developer of early stage cancer detection tests.
Under the terms of the transaction, the buyer will pay USD 8.00 billion in cash and stock for the business.
Of these amounts, USD 3.50 billion will be in the form of cash, while USD 4.50 billion will be in shares.
In addition, further payments will be due based on Grail’s revenue following completion. Although the precise value of this component has not been disclosed, it will represent a tiered single digit percentage of certain earnings.
Both companies’ boards have already given their seals of approval to the combination.
Completion remains subject to the green light from regulators and is slated to follow in the second half of 2021.
Following closing, Illumina’s shareholders are expected to hold stock amounting to around 93.0 per cent of the enlarged business, with Grail investors to own the balance.
Revenue is expected to be positively impacted from 2021.
Illumina has said the deal will increase its total addressable market, while offering multiple opportunities for growth and accelerating adoption of Grail’s NGS-based early multi-cancer detection test.
The buyer will also benefit from an enhanced position in the clinical genomics segment as a consequence.
Menlo Park-based Grail has additional offices in Washington DC, North Carolina and the UK.
The firm’s technology is designed to detect cancer in its earliest stages, when it can be cured.
It has received a number of rounds of funding, the most recent of which closed in May, when it received USD 390.00 million in a Series D injection from the likes of PSP Investments and Canada Pension Plan Investment Board. Illumina also participated.
© Zephus Ltd