On June 25, genetic products maker
) completed its acquisition of eBioscience Holding Company, Inc.
for $315 million in cash. The payment was partly financed through
available cash resources and partly by a public offering of senior
notes. eBioscience is now a fully-owned subsidiary of
Also, Affymetrix's Compensation Committee agreed to issue about
1.32 million shares from its common stock as equity incentive
awards to encourage 278 eBioscience employees to join the
San Diego, California-based eBioscience has been a global leader
in immunology and oncology flow cytometry reagents offering a vast
selection of antibodies, enzyme-linked immunosorbent assays
("ELISAs") and proteins for life science research and diagnostics.
eBioscience has also been an industry leader in flow cytometry (a
technique for analysing microscopic particles) and immunoassay
reagents for immunology and oncology research and diagnostics.
The acquisition is expected to significantly boost Affymetrix's
foothold in the fast-growing immunology, oncology and translational
medicine markets, representing an annual opportunity of more than
$2.5 billion. It will diversify the company's revenue base, expand
its product range (to include a vast array of reagents) and
reinforce its growing molecular diagnostics business.
Management believes that the merger will increase the company's
operating income and gross margin in fiscal 2012. Besides expanding
its global reach, Affymetrix aims to exploit cross-selling
opportunities and invest in research and development ("R&D") to
develop new products using eBioscience's technology.
Affymetrix is a leading provider of microarray-based products
and services to the global research community. Along with
), it is one of the two major providers of microarray technologies,
primarily used in the field of genetic research.
The company, however, needs to successfully integrate its
acquisitions so that they do not turn out to be a waste. Affymetrix
is operating in an intensely competitive industry and faces risks
associated with lower R&D spending by its customers due to a
soft economy and government actions including budget cuts.
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