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Illumina (ILMN) Inks $1.2B Deal to Buy Pacific Biosciences

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Illumina (ILMN) taking out on its peer, in the $1.2-billion acquisition deal, will further strengthen the position of the former in the genomics market.
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Leading DNA sequencing company Illumina, Inc. ILMN recently announced signing an acquisition agreement to buy its fellow genomics company, Pacific Biosciences of California, Inc. PACB. With the announcement of the news on Nov 1, Illumina’s share price appreciated 1.71% the next day. Subject to customary closing conditions, the deal is expected to be completed by mid-2019.

Financial Details of the Deal

In an all-cash deal, Illumina is expected to pay around $8.00 per Pacific Biosciences share. This price is a 71% premium to Pacific Biosciences’ 30-day trading volume weighted average share price as of the market close on Oct 31, 2018. It also represents a total enterprise value of around $1.2 billion.

What Does the Deal Mean to Illumina?

Per Illumina, this buyout will complement its sequencing solutions. Currently, the company’s short-read platform addresses most sequencing applications. The addition of Pacific Biosciences' long-read platform will help the company better deal with select applications such as de novo sequencing and sequencing of highly homologous regions of genomes.

Furthermore, Pacific Biosciences recently announced new enhancements to its flagship DNA-sequencing platform — the Sequel System. The features include a new version (6.0) of its software, new consumable reagents (3.0) and the latest SMRT Cell (1M v3). Per Illumina, this, when added with its infrastructure, will help expand clinical insights and biological discoveries.

Favorable Trends Drive Genomics Markets

Genomics has received a warm response from the MedTech investment space. Per MarketsandMarkets, the global Genomics market, which was worth $13.45 billion in 2016, is expected to reach $23.88 billion by 2022 at a CAGR of 10.2%.

The global Genomics markets have benefited from a streak of solid developments in sequencing, microarray, Polymerase Chain Reaction (PCR), Nucleic acid extraction and Purification techniques.

Moreover, per Illumina, the long-read sequencing market is projected to value around $2.5 billion by 2022.

Further, the implications of Artificial Intelligence (AI), cloud-based technologies and R&D focus have provided the companies with significant exposure to Genomics and a competitive edge in the MedTech space.

There are other companies poised to gain from the rising influence of Genomics on MedTech. Thermo Fisher Scientific Inc. TMO offers a comprehensive portfolio of genotyping solutions for SNP, indel and CNV analysis.QIAGEN N.V. QGEN also offers one of the broadest portfolios of molecular technologies for human healthcare.

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Thermo Fisher Scientific Inc. (TMO) : Free Stock Analysis Report
Pacific Biosciences of California, Inc. (PACB) : Free Stock Analysis Report
QIAGEN N.V. (QGEN) : Free Stock Analysis Report
Illumina, Inc. (ILMN) : Free Stock Analysis Report
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