Ex-Affymetrix (Santa Clara, California) Execs Offer to Buy Former Employer for $1.5B

Fully Financed Proposal Represents a 75% Premium to Affymetrix’ Last Unaffected Stock Price as of January 8, 2016

Acquisition of Affymetrix Will Lead to Additional Investment in Research, Enhanced Innovation and Advancement of Genomics

Former Affymetrix Executives’ “Origin” Has Option of Combining with Centrillion Following Completion of Affymetrix Transaction

PALO ALTO, Calif.--(BUSINESS WIRE)--Origin Technologies Corporation, LLC (“Origin”), a newly created entity owned by a group of former Affymetrix executives today announced that it submitted a proposal to acquire Affymetrix, Inc. (“Affymetrix”) for $16.10 per share in an all-cash transaction valued at approximately $1.5 billion. This proposal represents a 75% premium to Affymetrix’ unaffected closing share price of $9.21 on the last trading day prior to the announcement of Thermo Fisher Scientific Inc.’s (“Thermo”) proposed acquisition of Affymetrix, and offers Affymetrix stockholders a 15% premium relative to Affymetrix’ proposed transaction with Thermo, under which Affymetrix stockholders would receive only $14.00 per share in cash.

“We have tremendous respect for Affymetrix and its leadership team and believe that our unique insights and desire to accelerate innovation at the Company will result in advances in the science of genomics and related scientific breakthroughs in human health and life sciences.”

“Our offer presents a compelling opportunity for Affymetrix’ stockholders to realize superior value through an attractive premium, along with a transaction structure and customary closing conditions similar to the offer from Thermo,” said Dr. Wei Zhou, President of Origin. “We have tremendous respect for Affymetrix and its leadership team and believe that our unique insights and desire to accelerate innovation at the Company will result in advances in the science of genomics and related scientific breakthroughs in human health and life sciences.”

Origin’s all-cash proposal is fully financed and not subject to any financing conditions. To fund the transaction, including the termination fee payable under Affymetrix’ merger agreement with Thermo, Origin has secured fully-committed debt financing from SummitView Capital, a highly respected private equity firm with a track record of successfully closing transactions in the United States and around the world. Assuming a merger agreement with Affymetrix is reached expeditiously, Origin expects the transaction to close by the end of the second quarter of 2016.

Separate from Origin’s acquisition of Affymetrix, and after completion of the acquisition of Affymetrix, Origin has the option of combining with Centrillion Technology Holdings Corp. (“Centrillion”), a Palo Alto-based genomic technologies company founded by Dr. Zhou in 2009. Centrillion is leveraging an extensive intellectual property portfolio and the latest advances in engineering, chemistry and biochemistry to develop an array of solutions, from targeted sequencing to 3D gene expression, all based upon a unifying genomic analysis technology. Centrillion’s work is supported by a new generation of sequencing-compatible DNA chips, which combine the high density of first-generation chips with the high-quality probes of more recent innovations, all in one affordable and scalable model. Should Origin ultimately combine with Centrillion, Origin-owned Affymetrix and Centrillion would offer an unparalleled range of microarray and DNA sequencing technology products and services for customers. The two companies would be well-positioned to build share in a $46 billion worldwide genomics market opportunity covering clinical lab, academic research, agriculture and environment and precision medicine.

For more information, please visit http://origin.acquisitionproposal.com.

The full text of the letter sent by Origin to Affymetrix on March 18, 2016 is as follows:

March 18, 2016

VIA DELIVERY AND EMAIL

Frank Witney
President and Chief Executive Officer
Affymetrix, Inc.
3420 Central Expressway
Santa Clara, CA 95051

Dear Mr. Witney:

On behalf of Origin Technologies Corporation, LLC (“Origin”), we are pleased to submit this proposal to acquire all outstanding shares of Affymetrix, Inc. (“Affymetrix”) for $16.10 per share in cash. Origin is led by Glenn McGall, Janet Warrington, Vern Norviel and me. As you know, we are all former Affymetrix senior executives and have great respect for Affymetrix. During our multi-decade careers, we have helped pioneer new genomics technologies, and we contributed to Affymetrix’ early development and success. We have a very high regard for Affymetrix, its technology, global distribution network, management team and employees, and we believe that this transaction presents a very compelling opportunity for Affymetrix stockholders, customers and employees alike.

We strongly believe that our fully financed offer is superior to the offer from Thermo Fisher Scientific Inc. (“Thermo”). As set forth in more detail below, our proposal would deliver:

• Substantially higher value to Affymetrix stockholders with customary closing conditions similar to Thermo’s offer;
• Greater long-term growth opportunities for employees as we help Affymetrix achieve its full potential as a standalone, global company focused on genomics and proteomics;
• Continued delivery of Affymetrix’ existing technologies with additional investment in research, enhanced innovation and service for customers who want to achieve the highest quality research outcomes; and
• The opportunity to acquire new technologies which would enable sequencing the complete human genome for the benefit of researchers and patients around the world.

The key terms of our proposal are as follows:

Based on our analysis of publicly available information, Origin proposes to acquire all the outstanding shares of Affymetrix’ common stock at a price per share in cash of $16.10 (the “Per-Share Price”). Our proposal provides an aggregate of approximately $200 million on a fully diluted basis of additional value over the offer from Thermo and represents a premium of 15% over the Thermo offer and a 75% premium over the closing price of $9.21 for Affymetrix stock on the final day of trading prior to the Thermo announcement.

In addition, we propose to treat all outstanding stock options and restricted stock units in the same manner as they are treated under your Agreement and Plan of Merger with Thermo, dated as of January 8, 2016 (the “Thermo Merger Agreement”). Specifically, (i) vested stock options would be cashed-out upon the closing of the proposed transaction and (ii) unvested stock options and unvested restricted stock units would be assumed and substituted with cash awards based on the Per Share Price with the same vesting, settlement and delivery schedule as the unvested stock options or unvested restricted stock units that they replaced. We would also fund the repayment in full of Affymetrix’ credit agreement and satisfy in full all obligations to the holders of Affymetrix’ convertible notes. Finally, we are also willing to fund the payment of the $55,000,000 termination fee that would be due to Thermo under the terms of the Thermo Merger Agreement.

We are prepared to commence a due diligence review promptly. Given our knowledge of Affymetrix and its technology, we would expect our due diligence review to be completed within two weeks. During the completion of our due diligence review, we are prepared to negotiate a definitive merger agreement. Subject to our review of the disclosure schedule relating to the Thermo Merger Agreement, we are prepared to enter into a merger agreement based on the agreement that Affymetrix has agreed with Thermo. Consistent with the Thermo Merger Agreement, we would expect our merger agreement to contain only customary closing conditions. In fact, we expect our closing conditions would be fewer than those required under the Thermo Merger Agreement, as Origin is a U.S. owned and controlled company and there are no initial antitrust reviews needed outside the United States.

We are receiving fully committed financial support for the proposed transaction from SummitView Capital, a highly respected private equity firm with a track record of successfully closing transactions in the United States and around the world. Thus, we do not propose to condition the proposed transaction on obtaining financing. Enclosed with this letter is a letter from SummitView Capital containing details of their financing commitment along with further background information on their fund. As a sign of our confidence in our ability to close the proposed transaction, in addition to agreeing to pay the $55,000,000 termination fee payable to Thermo under the Thermo Merger Agreement, we are prepared to agree to a $75 million reverse termination fee, supported by a letter of credit.

This offer is non-binding and remains subject to satisfactory completion of our due diligence review and the negotiation and execution of a mutually acceptable definitive merger agreement, which would be subject to the approval by our respective boards. Please also note that this letter is not meant to, and does not, create or constitute any legally-binding obligation, liability or commitment by us concerning a proposed transaction, and, other than any confidentiality agreement we may enter into with you, there will be no legally-binding agreement between us regarding the proposed transaction unless and until we enter into a definitive merger agreement with you.

Separate from Origin’s acquisition of Affymetrix, after completion of the acquisition of Affymetrix, Origin will have the option of combining with Centrillion Technology Holdings Corp. (“Centrillion”), a genomic technologies company I founded and of which I serve as President and CEO. Founded in 2009 and based in Palo Alto, Centrillion is leveraging the latest engineering, chemistry and biochemistry advances to develop transformative genomic technologies that will accelerate discovery and reveal the “real genome” that has thus far been obscured by its complexity and the limitations of existing technologies. Such a combination would unite Affymetrix’ outstanding team, products and global distribution network with Centrillion’s new generation of genomics technologies. The combination would also bring together the two companies’ highly compatible teams and shared values, better positioning Centrillion and Affymetrix to help scientists answer today’s pressing genomics questions and push through breakthroughs in critical areas for human health and safety.

We are confident that after you have considered Origin’s offer, you will agree that our proposal constitutes a “Superior Proposal” under the terms of the Thermo Merger Agreement and that our proposal presents a compelling opportunity for your stockholders. In light of your approaching stockholder meeting to consider the Thermo proposal, we look forward to your prompt response.

Sincerely yours,

By:_______________________

Wei Zhou
President
Origin Technologies Corporation, LLC

cc: Affymetrix Board of Directors

About Origin

Origin Technologies Corporation, LLC is owned by a group of former Affymetrix executives, who share a passion and vision for advancing genomics for precision medicine and other critical applications. The entity was formed for the specific purpose of acquiring Affymetrix.

Cautionary Statement

Statements about the expected timing, financial impact and effects of the proposed transaction, and other statements in this press release that are not historical facts, are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements involve risks and uncertainties that could cause actual results to differ materially from such forward-looking statements. Such risks and uncertainties include the actual timing of the closing of the acquisition, the satisfaction of the conditions to closing in the acquisition agreement, any termination of the acquisition agreement and Origin’s potential combination with Centrillion. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date such statements are made. We do not undertake any obligation to update any forward-looking statements to reflect events, circumstances or new information after the date hereof, except as required by law.