British Biotech Horizon Discovery Pays $85 Million for GE Healthcare's Gene-Editing Biz
Published: Jul 19, 2017
Horizon Discovery Group plc (LSE: HZD), a global leader in the application of gene editing technologies, today announces that it has entered into an agreement to acquire Dharmacon from General Electric Company for a total consideration of $85 million (£65 million), subject to a working capital adjustment at completion of the Acquisition (Completion).
Upon Completion, which is conditional, inter alia, on the approval of the Placing by Horizon shareholders and anti-trust clearance of the Acquisition in the US, General Electric Company will receive $50 million in cash and a subsidiary of General Electric Company will be issued with $35 million in new Ordinary Shares in Horizon to be valued at the Placing Price of 205 pence, equating to 13,064,868 new Ordinary Shares (representing 8.8 per cent. of the Enlarged Share Capital of Horizon) (the “Consideration Shares”).
The Company also announces that it will raise £76.4 million, net of expenses, through the issue by the Company of 39,024,390 new Ordinary Shares at the Placing Price of 205 pence. The Placing is being effected by Numis and Cowen, with Numis acting as the Company's Nominated Adviser and Broker, on, and subject to, the terms of the Placing Agreement. In addition to satisfying the cash consideration for the Acquisition, the proceeds from the Placing will also provide additional working capital for the Enlarged Group.
A subsidiary of General Electric Company is expected to own 8.8 per cent. of Horizon following the Acquisition and the Placing. A standstill and lock-up agreement will be entered into with Horizon, which provides for a 12 month standstill period and a separate 12-month lock-up period for the Consideration Shares, followed by a further 6-month orderly market period.
Dharmacon is an indirect wholly owned subsidiary of General Electric Company and is a global leader in RNAi products with a fast growing gene editing product portfolio especially in CRISPR reagents and arrayed libraries. Dharmacon has a strong brand which is instantly recognisable and trusted in the academic research community for quality, cost, delivery and support.
The Acquisition will create immediate market access for Horizon’s next generation research product and service offerings through a robust eCommerce platform and established global distribution channels, especially in Asia-Pacific. Dharmacon delivered revenues of $36.7 million in the year ended 31 December 2016 and EBITDA of $5.4 million.
The combination will create a leading global player in the application of gene-editing and gene modulation in life science research and further underpins Horizon’s Cell Builders model where gene editing and modulation platforms are used to design, engineer and apply cells for the advancement of human healthcare.
Darrin Disley, CEO of Horizon commented: “Through the combination of complementary technology, product portfolios and manufacturing capabilities, the acquisition of Dharmacon by Horizon creates an emerging leader in the application of gene modulation technologies in life science research. We expect that the brand recognition, and sales, marketing (including eCommerce) and distribution channel particularly in the academic community as well as intimate relationships in Biotech and Pharma that Dharmacon will bring to Horizon, will transform the opportunity for Horizon’s product portfolio as well as generate attractive cost-base synergies.”
Kieran Murphy, President and CEO of GE Healthcare commented: “We are pleased to reach an agreement that combines the strong Dharmacon brand and technologies with the industry leading gene editing technologies, products and services of Horizon. We believe that the combination creates a global leader in gene modulation and are excited to retain a meaningful stake in the combination.”
Horizon Discovery Group plc
Darrin Disley, Chief Executive Officer
Richard Vellacott, Chief Financial Officer
Chris Claxton, VP Investor Relations
Tel: +44 (0) 1223 655 580
Tel: +44 (0) 207 653 6000
Numis Securities Limited (Broker and NOMAD)
Tel: +44 (0) 207 260 1000
Cowen and Company LLC
Tel: +1 646 562 1010
Zyme Communications (Trade and Regional Media)
Tel: +44 (0)7787 502 947
Consilium Strategic Communications (Financial Media and Investor Relations)
Mary-Jane Elliott / Susan Stuart / Matthew Neal / Melissa Gardiner
Tel: +44 (0) 20 3709 5701
About Horizon Discovery Group plc - see www.horizondiscovery.com
Horizon Discovery Group plc (LSE: HZD) ("Horizon"), is a leading global gene editing company that designs and engineers genetically-modified cells and then applies them in research and clinical applications that advance human health.
Horizon’s core capabilities are built around its proprietary translational genomics platform, a highly precise and flexible suite of gene editing tools (rAAV, ZFN, CRISPR and Transposon) able to alter almost any gene sequence in human or mammalian cell-lines.
Horizon offers over 23,000 catalogue products and related research services based on the generation and application of cell and animal models that accurately recapitulate the disease-causing genetic anomalies found in diseases like cancer. Horizon’s commercial offering has been adopted by over 1,600 unique research organisations in over 50 countries, as well as in the Company's own pipeline of innovation, to support a greater understanding of the genetic drivers of disease and the development of molecular, cell and gene therapies that can be prescribed on a personalised basis.
Horizon is headquartered in Cambridge, UK, and is listed on the London Stock Exchange's AIM market under the ticker “HZD”.
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MEMBERS OF THE PUBLIC ARE NOT ELIGIBLE TO TAKE PART IN THE PLACING. THIS ANNOUNCEMENT AND THE TERMS AND CONDITIONS SET OUT IN THE APPENDICES ARE FOR INFORMATION PURPOSES ONLY AND ARE DIRECTED ONLY AT: (A) PERSONS IN MEMBER STATES OF THE EUROPEAN ECONOMIC AREA WHO ARE QUALIFIED INVESTORS WITHIN THE MEANING OF ARTICLE 2(1)(E) OF THE PROSPECTUS DIRECTIVE ("QUALIFIED INVESTORS"); (B) IN THE UNITED KINGDOM, PERSONS WHO (I) HAVE PROFESSIONAL EXPERIENCE IN MATTERS RELATING TO INVESTMENTS AND FALL WITHIN ARTICLE 19(5) OF THE FINANCIAL SERVICES AND MARKETS ACT 2000 (FINANCIAL PROMOTION) ORDER 2005 (THE “ORDER”); OR (II) ARE PERSONS FALLING WITHIN ARTICLE 49(2)(A) TO (D) ("HIGH NET WORTH COMPANIES, UNINCORPORATED ASSOCIATIONS, ETC") OF THE ORDER; (C) IN THE UNITED STATES, TO “QUALIFIED INSTITUTIONAL BUYERS”, AS DEFINED IN RULE 144A OF THE U.S SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) AND (D) OTHER PERSONS TO WHOM IT CAN LAWFULLY BE COMMUNICATED (ALL SUCH PERSONS REFERRED TO IN (A), (B), (C) AND (D) TOGETHER BEING REFERRED TO AS "RELEVANT PERSONS").
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ANY FAILURE TO COMPLY WITH THESE RESTRICTIONS MAY CONSTITUTE A VIOLATION OF THE SECURITIES LAWS OF ANY SUCH JURISDICTIONS.
Numis, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting exclusively for the Company in relation to the transaction referred to herein. Numis is not acting for, and will not be responsible to, any person other than the Company for providing the protections afforded to customers of Numis or for advising any other person on the contents of this announcement or any other matter, transaction or arrangement referred to herein.
Cowen, which is authorised in the US by the Financial Industry Regulatory Authority (“FINRA”), is acting exclusively for the Company in relation to the transaction referred to herein. Cowen is not acting for, and will not be responsible to, any person other than the Company for providing the protections afforded to customers of Cowen or for advising any other person on the contents of this announcement or any other matter, transaction or arrangement referred to herein.
Evercore Partners International LLP ("Evercore"), which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, is acting as financial adviser exclusively for Horizon and no one else in connection with the Transaction referred to in this announcement and will not regard any other person as its client in relation to the matters referred to in this announcement and will not be responsible to anyone other than Horizon for providing the protections afforded to clients of Evercore, nor for providing advice in relation to the matters referred to in this announcement.
Lazard & Co., Limited, which is authorised and regulated in the United Kingdom by the Financial Conduct Authority, and Lazard Frères & Co. LLC, which is authorised in the US by FINRA, are acting exclusively for General Electric Company and for no one else in connection with the Acquisition and will not be responsible to anyone other than General Electric Company for providing the protections afforded to their clients or for providing advice in connection with the Acquisition. None of Lazard & Co., Limited, Lazard Frères & Co. LLC and their respective affiliates owes or accepts any duty, liability or responsibility whatsoever (whether direct or indirect, whether in contract, in tort, under statute or otherwise) to any person who is not a client of Lazard & Co., Limited and Lazard Frères & Co. LLC in connection with this announcement, any statement contained herein, the Acquisition or otherwise.
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