Illumina, Inc. (ILMN) agreed to acquire Solexa, Inc. (SLXA) in a stock-for-stock merger. Under the merger agreement, Solexa's stockholders will receive, subject to certain "collar"provisions, shares of Illumina common stock valued at $14.00 per Solexa share, which represents a total equity consideration of approximately $600 million.
In addition, Illumina has entered into a definitive securities purchase agreement with Solexa in which Illumina has agreed to invest $50 million in Solexa in exchange for newly issued Solexa shares, subject to customary closing conditions.
Together, Illumina and Solexa will create the only company with genome-scale technology for genotyping, gene expression and sequencing, the three cornerstones of modern genetic analysis.
The merger, subject to customary closing conditions, including regulatory approvals, is expected to close by the end of the first quarter of 2007.
The transaction is expected to be modestly accretive in 2008 and significantly accretive thereafter.
Illumina's earnings outlook for 2006 remains unchanged. Earlier, the company expected 2006 non-GAAP net income to be at least $49 million or $1.00 per share. Analysts expect earnings of $0.74 per share.
