Qiagen, a Dutch manufacturer of genetic testing equipment, announced Sunday it will purchase Digene Corp. for $1.6 billion in cash and stock. Digene produces DNA and RNA screening tests for cervical cancer and other diseases affecting women. Holders of Digene shares will receive cash and shares of Qiagen valuing each Digene share at $61.25, 37% above their Friday close. Qiagen is projecting that Digene will add revenue of $58-60 million in Q4 and $260-270 million for full-year 2008. The combined company is forecast to post molecular diagnostics revenues of over $350 million and overall revenues of over $800 million next year. "The joint franchises link virology with oncology, thereby creating an exceptional platform to add next-generation and high-value molecular diagnostic products and strategically position the company for future growth," said Qiagen CEO Peer Schatz, who will retain his position. Excluding charges and costs, the purchase should dilute Qiagen's Q4 adjusted EPS by $0.03-0.04. The deal, which is expected to close in August or September, is forecast to increase Qiagen's full-year 2008 EPS by $0.02-0.04.
Sources: Press release, MarketWatch, Reuters, Forbes
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Stocks/ETFs to watch: Qiagen N.V. (GQEN), Digene Corp. (DIGE). Competitors: Invitrogen Corp. (IVGN), Sigma-Aldrich Corp. (SIAL), CYTYC Corp. (CYTC). ETFs: iShares NASDAQ Biotechnology Index ETF (IBB), HOLDRS Biotech (BBH), PowerShares Dynamic Biotech & Genome (PBE)
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