Origin Technologies and Thermo Fisher Scientific in Acquisition Love Triangle with Affymetrix (Santa Clara, California)
March 23, 2016
By Mark Terry, BioSpace.com Breaking News Staff
Palo Alto, Calif.-based Origin Technologies Corp., a holding company formed by ex-Affymetrix executives, upped the ante on its attempt to buy Affymetrix.
Thermo Fisher Scientific , headquartered in Waltham, Mass., has already made plans to acquire Affymetrix for $1.3 billion. Origin made an offer for $16.10 per share last Friday, but has increased its bid to $17 per share. The Thermo Fisher bid was priced at $14 per share.
Origin is a shell company helmed by former Affymetrix executives with financial backing from a Chinese private equity firm, SummitView Capital. Affymetrix originally turned down Origin’s first bid, having doubts about its financing. Thermo Fisher also criticized Origin’s proposal, suggesting that it wouldn’t survive regulatory review because of SummitView’s support.
“The proposal put forth to Affymetrix by Origin Technologies, a newly created shell entity relying on a vague and insufficient financing package from a Chinese firm,” said Marc Casper, president and chief executive officer of Thermo Fisher, in a statement, “is highly uncertain and speculative and does not constitute, and could not reasonably be expected to lead to, a superior proposal under the merger agreement, and Affymetrix and its board of directors could not reasonably determine otherwise.”
This back-and-forth has actually been ongoing for several months, although it crested this month. “We held preliminary discussions in the fall of 2015 with individuals who became principals and potential backers of Origin, and in November 2015 I invited them to submit a written proposal if they had serious interest in a strategic transaction with Affymetrix,” said Frank Witney, president and chief executive officer of Affymetrix, in a statement. “We heard nothing further from them for over four months until they announced their unsolicited proposal on March 18.”
Affymetrix also described Origin as a “newly formed shell entity with no assets of which Affymetrix is aware, and whose sole source of funding for the proposed transaction is $1.5 billion in potential debt commitments.”
Origin’s president and chief executive officer, Wei Zhou, sent a letter yesterday to the Affymetrix board of directors that said, in part, “Based on public filings and after making certain assumptions relating to post-closing costs, we believe that the amounts reflected in the previous letter from SummitView Capital provided sufficient funds to close the transaction. Nonetheless, we understand Affymetrix’ board has questions regarding Origin’s financial ability to complete the proposed transaction.”
Affymetrix shareholders will vote on the Thermo Fisher deal tomorrow.
In a deal separate from a potential acquisition of Affymetrix by Origin, the company has an option of merging with Palo Alto-based Centrillion Technology Holdings Corp., which was founded by Zhou in 2009. The company is focused on exploiting an intellectual property portfolio on projects that include targeted sequencing and 3D gene expression.
Affymetrix focuses on GeneChip products and services, microarrays to sequence DNA for a variety of clinical and research purposes. If Origin combined with Centrillion, and then acquired Affymetrix, the combined companies would have the potential to take a large chunk out of the $46 billion global genomics market.
Thermo Fisher Scientific, in its current form, was created in 2006 when Thermo Electron merged with Fisher Scientific. In April 2013, it acquired Life Technologies Corp for $13.6 billion from Hoffmann-La Roche. The company owns an enormous number of companies and brands, including Accumed , Epsilon, Keystone Scientific, Naopure, Philips Scientific and others.