LONDON (ShareCast) - (ShareCast News) - Gene editing technology company Horizon Discovery Group entered an agreement to acquire Dharmacon from General Electric for a total consideration of $85m (£65m), it announced on Wednesday, subject to a working capital adjustment at completion.
The AIM-traded firm said that upon completion - which remained conditional on Horizon shareholders approving a placing, as well as antitrust clearance in the US - General Electric would receive $50m cash, and one of its subsidiaries will receive $35m in new ordinary shares in Horizon, representing 8.8% of the company's enlarged issued share capital.

Horizon also announced that it would raise £76.4m, net of expenses, through the issue of 39,024,390 new ordinary shares at the placing price of 205p.

In addition to satisfying the cash consideration for the acquisition, the board said the proceeds from the placing would also provide additional working capital for the enlarged group.

A subsidiary of General Electric is expected to own 8.8% of Horizon following the acquisition and the placing.

Horizon said a standstill and lock-up agreement would be entered into, which would provide for a 12-month standstill period and a separate 12-month lockup period for the consideration shares, followed by a further six month orderly market period.

"Through the combination of complementary technology, product portfolios and manufacturing capabilities, the acquisition of Dharmacon by Horizon creates an emerging leader in the application of gene modulation technologies in life science research," said Horizon CEO Darrin Disley.

"We expect that the brand recognition, and sales, marketing - including e-commerce - and distribution channel particularly in the academic community as well as intimate relationships in Biotech and Pharma that Dharmacon will bring to Horizon, will transform the opportunity for Horizon's product portfolio as well as generate attractive cost-base synergies."

The company described Dharmacon - an indirect, wholly-owned subsidiary of General Electric - as a "global leader" in RNAi products, with a "fast growing" gene editing product portfolio, especially in CRISPR reagents and arrayed libraries.

It said Dharmacon had a "strong brand" which was "instantly recognisable and trusted" in the academic research community for quality, cost, delivery and support.

The acquisition would create "immediate" market access for Horizon's next generation research product and service offerings through a robust eCommerce platform and established global distribution channels, the board claimed, especially in the Asia-Pacific region.

Dharmacon delivered revenues of $36.7m in the year to 31 December 2016, and EBITDA of $5.4m.

The combination would create a "leading global player" in the application of gene-editing and gene modulation in life science research, the board explained, and would "further underpin" Horizon's 'Cell Builders' model, where gene editing and modulation platforms were used to design, engineer and apply cells for the advancement of human healthcare.

"We are pleased to reach an agreement that combines the strong Dharmacon brand and technologies with the industry leading gene editing technologies, products and services of Horizon," said GE Healthcare Kieran Murphy.

"We believe that the combination creates a global leader in gene modulation and are excited to retain a meaningful stake in the combination."

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