UPDATE 2-GE to buy cancer diagnostics company Clarient
Fri Oct 22, 2010 8:54am EDT
* To pay $580 mln, or $5 per common share
* Sees growing molecular diagnostics market
* Clarient shares jump to $5.04, above offer price
* GE, other industrials step up dealmaking (Rewrites, adds stock action, other details, background)
NEW YORK, Oct 22 (Reuters) - General Electric Co (GE.N) extended this month's acquisition streak, agreeing to buy cancer diagnostics company Clarient Inc (CLRT.O) for about $580 million net of cash and investments in a deal that sent Clarient shares up 35 percent in premarket trading.
GE's Healthcare unit will pay $5 per common Clarient share or $20 per preferred share, the companies said. Clarient's molecular diagnostics technology allows pathologists and oncologists to identify cancers, a market expected to triple to $47 billion within five years.
Clarient, based in Aliso Viejo, California, recorded 2009 sales of $92 million, according to Reuters data.
Before the deal was announced, Clarient shares closed at $3.74 on the Nasdaq on Thursday at their best level in more than a year. In premarket trading on Friday, they hit $5.04.
Goldman, Sachs & Co. (GS.N) was the financial adviser to Clarient on this transaction, while JP Morgan (JPM.N) advised GE Healthcare. The deal is expected to close in late 2010 or early 2011. Stockholders holding about 47 percent of Clarient's outstanding Clarient stock have agreed to tender their shares.
Safeguard Scientifics Inc. (SFE.N), which owns 26 percent of Clarient shares, said separately it would get $145 million from the deal. [ID:nWNAB6273]
RETURN TO DEALMAKING
GE, the largest U.S. conglomerate, has said it could spend up to $30 billion on takeovers over the next few years, marking a return to the dealmaking track it had exited during the recession.
On Oct. 6, GE reached a $3 billion deal for Dresser Inc [DRESS.UL], which makes gas engines used in oil production and mining, and bought a $1.6 billion portfolio of retail credit cards from Citigroup Inc (C.N), in moves intended to boost its energy and GE Capital businesses. [ID:nN06287898]
GE is also among the suitors for BAE Systems' (BAES.L) aerospace unit that could fetch up to $2 billion. Other suitors include Honeywell International (HON.N) and United Technologies (UTX.N), people familiar with the matter said this week. [ID:nN19135803]
The Clarient acquisition was the latest deal among cash-rich multinational industrial companies.
Earlier on Friday, Caterpillar Inc (CAT.N) signed an agreement to acquire engine maker MWM Holding GmbH from British private equity firm 3i Group Plc (III.L) for about 580 million euros ($810 million) in cash. [ID:nSGE69L0EN]
Earlier this week, industrial conglomerate Danaher Corp. signaled it was ready to step up dealmaking, saying it has $4 billion in acquisitions capacity. [ID:nN18269431] (Reporting by Nick Zieminski, editing by Dave Zimmerman)
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