Roche has made a hostile all-cash tender offer to acquire Ventana Medical Systems for approximately $3 billion. The proposal comes after repeated attempts by Roche to negotiate a collaboration with Ventana.
Ventana’s board of directors recommended that its shareholders take no action at this time. The board will review and consider Roche's offer and following the commencement of the tender offer, will make a recommendation to shareholders within 10 business days.
Roche bid $75 per share, late yesterday, which represents a 42% premium over the company’s closing price on June 22. Ventana opened trading today at $77.36.
Ventana is the fourth diagnostic company Roche has gone after this year. This acquisition marks Roche’s entry into tissue-based diagnostics. In March, Roche bought 454 Life Sciences from Curagen in a deal worth $154.9 million to gain control of the company’s DNA-mapping technology. A week later, the company bought BioVeris for $600 million and became the owner of a patent estate that would allow it to exploit the entire immunochemistry market. Last week, Roche stepped into the microarray market with a $272.5 million acquisition of NimbleGen.
"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,” comments Severin Schwan, CEO division Roche Diagnostics. “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."
Ventana 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, according to Roche. 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. Roche reports that this transaction will position the company with the most comprehensive diagnostic portfolio for enabling development and commercialization of personalized healthcare solutions in oncology.