Roche will make a tender offer to acquire all outstanding shares of common stock of Ventana Medical Systems for $75.00 per share in cash, or an aggregate of approximately $3 billion on a fully diluted basis.
This offer represents a 44% premium to Ventana's close of $51.95 on June 22, 2007 and a 55% premium to its three-month average of $48.30. The acquisition of Ventana, a leader in the fast-growing histopathology (tissue- based diagnostics) segment, will allow Roche to broaden its diagnostic offerings and complements its world leadership in both in-vitro diagnostic systems and oncology therapies. The entry of Roche into tissue-based diagnostics is an important step in Roche's strategy of delivering personalized healthcare solutions to patients.
Commenting on the offer, Franz B. Humer, Chairman and CEO of Roche, said: "We believe our proposal for Ventana represents a unique opportunity for both our companies and their respective stockholders. Ventana will be an outstanding addition to the Roche Group, and we believe we are the best strategic partner to capitalize on Ventana's potential. Our compelling, all- cash proposal and attractive premium recognize both the value created by Ventana to date and its future prospects. We hope that Ventana's Board and management will commence discussions with us to effect a negotiated transaction."
Roche has made multiple efforts to engage in meaningful discussions with Ventana's Chairman and Board concerning a negotiated transaction; however, as Ventana has so far declined to enter transaction discussions, Roche has decided to commence a tender offer. Roche remains willing to discuss a negotiated transaction agreed to by both parties, as this continues to be Roche's preferred option.
Severin Schwan, CEO Division Roche Diagnostics, said: "Our combined company will be uniquely positioned to develop companion diagnostics which enable the identification of patient responses to treatments, thereby offering more cost-efficient, differentiated and targeted medicines to patients. Roche's leadership in oncology and molecular biology, our strong global market position and broad sales and marketing reach, and our distinctive diagnostics capabilities in IT, workflow automation and test standardization make us the ideal partner for Ventana. Together, we have an exceptional opportunity to rapidly create further value for patients, customers, employees and shareholders through an expanded, global diagnostics platform for tissue analysis."
Ventana's leadership in tissue-based testing will broaden and complement Roche's leading in-vitro diagnostic and Life Science businesses (Molecular Diagnostics, Immunodiagnostics, Clinical Chemistry). Ventana employs around 950 people and reached sales of $238.2 million in 2006. The $1 billion tissue- based testing market is growing at 10% annually, twice the rate of the overall in-vitro diagnostics market. Key growth drivers in this market include test automation and standardization, the increasing incidence of cancer, and the increasing number of targeted cancer drugs requiring companion diagnostics. This transaction will position Roche with the most comprehensive diagnostic portfolio for enabling development and commercialization of personalized healthcare solutions in oncology.
Roche will operate Ventana as a dedicated business within the Roche Diagnostics Division, and will retain Ventana's headquarters in Tucson, Arizona. Severin Schwan continued: "We are highly impressed with Ventana's scientific and commercial accomplishments and we believe their world-class management and employees will be an excellent addition to Roche. By keeping Ventana as a dedicated business within Diagnostics, we aim to maintain and further develop the entrepreneurial spirit that has contributed to Ventana's success to date."
Roche will promptly commence a tender offer to purchase all of the outstanding common stock of Ventana for $75.00 per share in cash. The complete terms and conditions of the offer will be filed with the U.S. Securities and Exchange Commission. The offer will be subject to customary conditions, including the tender of a majority of Ventana's shares of common stock, on a fully diluted basis and Ventana's Board taking all necessary actions to make its shareholder rights plan inapplicable to Roche's offer. The Roche proposal is a fully financed, all-cash transaction, with no significant anticipated regulatory hurdles to completion.