Illumina Signs Definitive Agreement to Acquire Solexa

15-Nov-2006

Illumina, Inc. and Solexa, Inc. announced that they have entered into a definitive merger agreement under which Illumina will acquire Solexa in a stock-for-stock merger. Under the merger agreement, which was unanimously approved by the Boards of Directors of both companies, Solexa's stockholders will receive, subject to certain "collar"provisions, shares of Illumina common stock valued at $14.00 per Solexa share, which represents a total equity consideration of approximately $600 million. In addition, Illumina has entered into a definitive securities purchase agreement with Solexa in which Illumina has agreed to invest $50 million in Solexa in exchange for newly issued Solexa shares, subject to customary closing conditions.

Headquartered in Hayward, CA, with substantial operations in Cambridge, England, Solexa has developed a proprietary, next generation genetic analysis system for use in whole genome sequencing, targeted resequencing, digital gene expression and microRNA analysis. The market opportunity in sequencing is estimated at $1 billion, creating a market opportunity for the combined company in excess of $2.25 billion. Together, Illumina and Solexa plan to create the only company with genome-scale technology for genotyping, gene expression and sequencing.

The transaction is expected to be modestly accretive in 2008 and significantly accretive thereafter. In addition, Illumina expects to realize cost synergies primarily through cost avoidance and Illumina's ability to leverage its selling, general and administrative infrastructure, including elimination of Solexa's public company expenses.

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