) recently declared the pricing of its unsecured 4.00% Convertible
Senior Notes in the principal amount $105 million, due 2019. The
notes will be converted into the company's common stock at an
initial conversion price of roughly $5.88 a share.
) are acting as joint book-running managers for the notes offering
while Baird and BofA Merrill Lynch, a unit of
Bank of America
), are co-managers.
The announced conversion of every $1,000 principal notes into
roughly 170.0319 common shares of Affymetrix represents a premium
of about 25% to the company's stock price on June 19 on the NASDAQ
Global Select Market. To cover prospective over-allotments, under
the same terms and conditions, the company allowed the underwriters
to buy up to $10 million principal amount of additional notes.
The company will use the total proceeds to finance a part of its
impending acquisition of eBiocience Holding Company, Inc.
Affymetrix, in late 2011, announced its acquisition of
privately-held eBioscience, for $315 million. The transaction is
expected to be complete by the end of second quarter of 2012. In
case, the deal doesn't work out, Affymetrix's management decided
not to redeem the notes but utilize it for some other undisclosed
San Diego, California-based eBioscience is a global leader in
immunology and oncology flow cytometry reagents. It offers a vast
selection of antibodies, enzyme-linked immunosorbent assays
("ELISAs") and proteins for life science research and diagnostics.
eBioscience is an industry leader in flow cytometry (a technique
for analysing microscopic particles) and immunoassay reagents for
immunology and oncology research and diagnostics.
The acquisition will significantly boost Affymetrix's foothold
in the fast-growing immunology, oncology and translational medicine
markets, representing an annual opportunity of nearly $3 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.
However, Affymetrix is exposed to a volatile funding
environment. The company has been beset by uncertainties
surrounding National Institutes of Health ("NIH") funding. Decline
in government research grants may substantially affect the
Affymetrix is operating in an intensely competitive industry and
faces risks associated with lower research and development
(R&D) spending by its customers due to a soft economy and
government actions including budget cuts.
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