US-based genetics technology corporation Affymetrix agreed on Wednesday to acquire biomedical research company eBioscience for $330m.
The acquisition comes less than a month after eBioscience secured a $45m term loan and a $10m revolving line of credit from GE Capital, Healthcare Financial Services, a corporate venturing fund belonging to energy conglomerate General Electric.
In order to fund the acquisition, GE Capital, Healthcare Financial Services is now acting as the administrative agent for a $190m secured financing commitment enabling Affymetrix to pay for the deal.
Financial services firm Silicon Valley Bank, bank holding company CIT Bank and CIT’s healthcare lending facility CIT Healthcare are all acting as lenders in the loan. The $190m includes a $20m revolving credit facility.
Tim Barabe, chief financial officer of Affymetrix, said: "The combination of Affymetrix and eBioscience has significant benefits. With 2011 sales expected to exceed $70m, gross margins in excess of 70% and EBITDA (earnings before interest, tax, depreciation and amortisation) margin of approximately 30%, eBioscience makes Affymetrix a much stronger company, both operationally and financially. The purchase price represents approximately 4.5 times 2011 revenue and 14 times 2011 EBITDA."
Affymetrix is looking to complement its genomics product portfolio by incorporating eBioscience’s technology into the fields of immunology, oncology, cell biology, stem cell biology, and diagnostics while augmenting the molecular diagnostics element of its business.
Stephen P.A. Fodor, chairman of Affymetrix, said: "This transaction places Affymetrix at the forefront of immunology and oncology, two of the fastest growing segments of molecular and translational medicine. eBioscience complements our traditional businesses of genomics and cytogenetics, and dramatically strengthens our foundation in molecular diagnostics."