(Bloomberg) — Genetic sequencing giant Illumina Inc. agreed to acquire Grail Inc. in a deal valuing the cancer-detection startup at $8 billion.
Grail shareholders will receive $3.5 billion in cash and $4.5 billion in Illumina common stock, the companies said in a statement Monday. Both companies’ boards of directors have approved the transaction.
Illumina, a giant in the DNA sequencing space, serves as the backbone for consumer genetics tests and is becoming an integral part of pharmaceutical research efforts. Grail, originally founded by Illumina and later spun out as a standalone company, is developing a blood test that aims to detect multiple cancers early.
Illumina is also the supplier of the sequencers that Menlo Park, California-based Grail uses for performing its genomic tests. Bringing the two companies back together would put the testing and sequencing under one roof.
“We have an important opportunity to introduce routine and broadly available blood-based screening that enables early cancer detection when treatment can be more effective and less costly,” Illumina Chief Executive Officer Francis deSouza said in the statement.
Grail has a list of high-profile tech and health-care backers, including Bill Gates, Jeff Bezos, Merck & Co. and Johnson & Johnson, according to its website. The company had filed for an initial public offering this month. As a private company Grail has raised more than $1.9 billion, regulatory filings show.
San Diego-based Illumina already holds about 12% of Grail’s shares on a fully diluted basis, according to the statement. Grail investors aside from Illumina will receive about $7.1 billion. Shareholders will also be entitled to future payments representing a tiered single-digit percentage of certain Grail-related revenues.
(Adds CEO comment, details on the transaction from fifth paragraph)
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