Munched by Caliper:
>>HOPKINTON, Mass. and ALAMEDA, Calif., Feb. 13 /PRNewswire-FirstCall/ -- Caliper Life Sciences, Inc. (Nasdaq: CALP - News), a leading provider of products and services for drug discovery research, and Xenogen Corporation (Nasdaq: XGEN - News), a maker of advanced imaging systems including instruments, biological solutions and software designed to accelerate drug discovery and development, today announced their definitive agreement to merge. Under the agreement, Caliper will issue common stock and warrants, currently valued at approximately $80 million, in exchange for all of Xenogen's equity securities outstanding at the closing. The acquisition is a defining step in Caliper's strategic transformation into a leading provider of tools and services that increase the productivity and clinical relevance of life sciences research, and is expected to accelerate Caliper's revenue growth and profitability. Caliper and Xenogen will host a conference call to discuss the transaction today, Monday, February 13, at 9 am EST.
The integration of molecular tool technologies presents a key opportunity to improve drug discovery research. As highlighted in the FDA Critical Path Initiative, biomarker research and better experimentation models are essential to improve predictability and efficiency along the critical path from laboratory to commercial drug. The combination of Caliper's proprietary microfluidic technology and automation expertise with Xenogen's proprietary imaging technology addresses these key research needs by creating molecular level solutions that encompass in vitro (test tube) to in vivo (living organism) research. These technologies offer exceptional data quality and productivity advantages, and combining them to offer a highly correlated suite of products and services should result in earlier, clinically relevant insights in the drug discovery process.
"This transaction is a transformational event for Caliper," said Kevin Hrusovsky, president and CEO of Caliper. "The acquisitions of Zymark and NovaScreen, organic growth of Caliper's LabChip products, and the financial turnaround of our company have set the stage for the merger with Xenogen. We are achieving our goal of building a unique company with first-mover advantage in bridging in vitro and in vivo experimentation. Our strategy is being fulfilled, and with Xenogen's talented employees and remarkable technology, I am confident that we can create enhanced value for both Caliper and Xenogen stockholders."
David Carter, CEO of Xenogen added, "We believe that this merger leverages Xenogen's opportunity for the benefit of our customers, employees and stockholders. The combined company can deliver Xenogen's technology to more customers more efficiently. In the near future the development of sophisticated molecular level products aimed at providing new solutions for our customers will be enhanced by the combination of microfluidics and optical imaging. Our two companies share a common vision for leading innovative pre- clinical drug discovery."
The transaction is expected to be accretive in 2006 and 2007, as measured by EBITDA per share (earnings before interest, taxes, depreciation, amortization and restructuring charges), and the transaction is also expected to be EPS accretive in 2008. The combination is expected to improve Caliper's profit trajectory based on the following:
-- Revenue growth. Xenogen has had one of the highest reported organic
growth rates of public companies in the life sciences industry in
the last two years. Xenogen's reported revenue grew from $20.1
million in 2003 to $30.8 million in 2004. As previously reported
through September 30, 2005, Xenogen's revenue was $27.7 million
versus $21.2 million during the first nine months of 2004,
representing revenue growth of approximately 30 percent. Caliper
expects Xenogen's revenue contribution will both expand its revenue
base and boost its annual sales growth from mid-to-high single
digits into a range of ten to fifteen percent.
-- Cost efficiencies. Caliper has identified over $10 million in
potential annual cost savings through consolidation of
infrastructure with Xenogen. These cost savings are expected to
result primarily from the elimination of duplicate public company
costs, redundant G&A positions and facilities costs.
-- Cash flow effects. Caliper believes that the available cash
resources of the combined companies will be sufficient to accomplish
the integration and to fund the operations of the combined
businesses through 2006. Caliper expects to be cash flow positive
from operations beginning in 2007.
Under the terms of the agreement, in exchange for Xenogen's outstanding common shares and warrants to purchase common shares, Caliper will issue approximately 13.2 million common shares and approximately 5.125 million warrants to purchase Caliper common shares. These warrants will have a term of five years from the closing and an exercise price of $6.79 per share. The final exchange ratios for the issuance of Caliper common shares and warrants will be based on the capitalization of Xenogen at the closing of the proposed transaction. Based on Xenogen's current capitalization and certain assumptions regarding the exercise of Xenogen stock options in the period prior to the closing, each holder of a Xenogen common share would receive approximately 0.575 of a share of Caliper common stock and 0.223 of a warrant to acquire one Caliper common share. Upon the timely exercise of their warrants, Xenogen warrant holders will be entitled to receive the same number of Caliper common shares and warrants as Xenogen's stockholders.
Immediately following the closing, Xenogen stockholders will own approximately 26% of Caliper's outstanding common stock. Assuming the exercise of the outstanding Xenogen warrants and after giving effect to the exercise of the warrants issued by Caliper to the Xenogen equity holders, Xenogen stockholders would own approximately 32% of the combined company on a fully diluted basis. The transaction is subject to the approval of both Caliper and Xenogen stockholders, as well as standard regulatory approvals, and is expected to close in the second quarter of 2006.
Caliper and Xenogen will host a conference call to discuss the transaction today, Monday, February 13, at 9 am EST. To participate in the call, please dial 866.383.8008 five to ten minutes prior to the call and use the participant passcode of 12973890. International callers can access the call by dialing 617.597.5341 and using the same passcode.
A webcast of the proceedings is available at fulldisclosure.com
Webcast and telephone replays of the conference call will be available approximately two hours after the completion of the call. To access a recording of the proceedings from February 13 through February 20, dial 888-286-8010 and use the participant passcode of 37740303. International callers can access the playback by dialing 617.801.6888 and using the same participant passcode.<<
snip
I never re-entered, but my Mom's cost basis was $2.85, so I guess that's OK, as the stock is at $3.35 now. And she owns a little CALP, too, which is flat this morning.
Cheers, Tuck. |
