Shares of Pacific Biosciences of California (NASDAQ: PACB), a developer of systems for gene sequencing, are soaring to a two-year high in pre-market trading.
Pacific Biosciences announced an agreement to be bought by bigger rival Illumina, Inc. (NASDAQ: ILMN) in a deal valued at about $1.2 billion, or $8 per share in cash. The per share value represented a 77 percent premium over the $4.51 at which Pacific Biosciences shares closed Thursday.
The boards of both companies approved the transaction.
Separately, Pacific Biosciences reported a drop in Q3 revenues and a wider-than-expected loss, blaming the predicament on some customers holding back in purchasing products in order to buy either recently launched products or the ones scheduled to be launched early next year.
Why It's Important
The purchase complements Illumina's short-read sequencing solutions with the former's long-reads, Illumina said.
Gene sequencing is a process of determining the sequence of nucleotides in a segment of DNA. It's used by companies to detect changes in a gene that may cause a disease, as well as to identify which stretches of DNA contain genes and which carry regulatory instructions that turn genes on or off.
With this deal, Illumina is positioned to provide integrated workflows and novel innovations that integrate both technologies to help researchers expedite discoveries and clinicians provide new tests at affordable rates.
The completion of the transaction hinges on approval by Pacific Biosciences shareholders, as well as other customary closing conditions, including applicable regulatory approval.
The deal is expected to be consummated in mid-2019.
In pre-market trading, Pacific Biosciences shares were skyrocketing 65.63 percent to $7.47. Illumina was trading flat.
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