Zymergen Cuts 80 More Jobs Following Buyout by Ginkgo BioWorks - Updated

Ginkgo Bioworks

As Ginkgo Bioworks prepares to acquire Zymergen for around $300 million, the latter announced it is adding 80 job cuts to its already decreased headcount. This will bring Zymergen to about half the size it was a year ago, according to the San Francisco Business Times

This news comes after the company announced Monday that it is conducting cost restructuring activities that include cutting underperforming programs and reducing staff counts. 

The transaction, Ginkgo's largest acquisition to date, is expected to close by the first quarter of 2023, subject to regulatory approval and other closing conditions. When completed, Ginkgo said it plans to integrate the two firms' automation and software capabilities to support biological engineering development programs. By acquiring Zymergen, Ginkgo also gets to reduce its incremental run-rate operating expenses, particularly from absorbing Zymergen's staff instead of having to hire new ones.

"We are thrilled to integrate Zymergen's capabilities into our Foundry, which we expect to accelerate the growth of our platform as we continue to deliver on our mission to make biology easier to engineer for our customers, helping us drive down the costs of cell programming as we invest in scale. We can't wait to welcome Zymergen's technical teams, who will support our scaling objectives," Jason Kelly, chief executive officer and co-founder of Ginkgo Bioworks, said.

Zymergen benefits from this takeover as it now has the tools to evaluate strategic alternatives for its drug discovery and advanced materials businesses. 

"We're excited about the opportunities created by combining our technologies to accelerate Ginkgo's platform development to better serve customers, promote Zymergen's public benefit purpose, and achieve our shared vision of sustainability and a world built on biology. The transaction also represents a compelling opportunity for our stockholders to participate in the future growth and upside potential of the combined company," Jay Flatley, the chairman and acting CEO of Zymergen, noted. 

The deal already has the unanimous go-ahead of both firms' boards of directors. Zymergen shareholders will receive 0.9179 in Ginkgo shares for every Zymergen stock they own, translating to a 5.25% pro forma ownership. 

Details on the transaction will be shared at a conference call. 

The announcement comes just a month after Ginkgo signed an agreement with Bayer to support the former's expansion plans for its agricultural biologicals. 

The deal is associated with a previous transaction that saw Gingko acquiring Bayer's 175,000-square-foot Biologics Research & Development site in West Sacramento, plus its team and internal discovery and lead optimization platform, for around $83 million. 

The purchase is not yet finalized as of this writing, but it is expected to close by the fourth quarter, pending regulatory approvals and other conditions. Included in the deal is the integration of Joyn Bio's R&D assets. Ginkgo and Bayer, through Leaps, jointly launched Joyn Bio in 2017. 

Ginkgo is creating a platform that will enable users to program cells in the same seamless and efficient way as computers are programmed, to be used in a wide range of industries, including food, agriculture, pharmaceuticals and industrial chemicals.  

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