Life Technologies Gains on Buyout Speculation

Published: Jan 21, 2013

Life Technologies Corp. (LIFE), a maker of DNA-sequencing equipment and laboratory materials, rose to its highest-ever value after the hiring of strategic advisers sparked speculation the company may be sold. Life Technologies jumped 9.3 percent to $60.10 at 9:43 a.m. New York time, after earlier touching to $61.28, its highest intraday price since the shares began trading in February 1999. The Carlsbad, California-based company had increased 19 percent in the 12 months through yesterday. Deutsche Bank AG and Moelis & Co. were retained “to assist in its annual strategic review,” Life said in a statement today. The Financial Post reported the hiring late yesterday, saying the advisers have approached at least four private-equity firms as potential buyers. “While price talk is apparently in the $65 to $75 range, our initial analysis suggests an LBO transaction valuing Life’s equity in the $50 to $60 range is more realistic in present market conditions,” Jon Wood, an analyst with Jefferies & Co., wrote in a research note today, referring to the potential for a leveraged buyout. Wood cited the company’s “resilient and predictable revenue profile, highly scalable operating model, and extraordinary capital efficiency” as attractive, while noting “risk appetite to be at present more limited than that observed prior to the 2008/2009 financial crisis.” Attractive Targets. Gene-sequencing companies such as Life and San Diego-based Illumina Inc. (ILMN) are attractive takeover targets because their technology can be used to provide a blueprint of a person’s DNA, information that may eventually be used to diagnose disease, identify the risks of certain conditions or better target medicines. Roche Holding AG (ROG), the world’s biggest maker of cancer drugs, failed last year in a hostile bid for Illumina.

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