Medical research company Invitrogen Corp. said early today that it plans to buy fellow life sciences toolmaker Applied Biosystems Group to $6.7 billion, or $38 a share, in cash and stock. Invitrogen said the newly combined company, to be called Applied Biosystems, should generate about $3.5 billion in sales annually.
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Applied Biosystems is one of two publicly traded units of Applera Corp. The other, Celera Genomics Group, is best known for sequencing the human genome independent of the government's effort under the leadership of Craig Venter.

Under the terms of the merger agreement, Applera-Applied Biosystems shareholders will receive $38.00 for each share of Applera-Applied Biosystems stock they own in the form of Invitrogen common stock and cash. The expected split between cash and stock is 45 per cent and 55 per cent, respectively.

Applera-Applied Biosystems shareholders will receive a value of $38.00 a share if the 20 day volume-weighted average price of Invitrogen common stock is in the range of $43.69 - $46.00 three business days prior to the close of the transaction. The total value per share will differ if Invitrogen's 20-day volume-weighted average price is above or below that range, measured shortly prior to the close of the transaction.

The consideration represents a premium of 17 per cent to Applied Biosystems's closing price on 11 June 2008, or 12 per cent to its average closing price in the last 30 trading days. Applera-Applied Biosystems shareholders also will have the option to request all cash or all stock. Upon completion of the transaction, Invitrogen shareholders will own the majority of the company.

The companies expect the acquired entity to be neutral to slightly accretive to Invitrogen's earnings per share the first year after close and significantly accretive in year two. Following the closing of the transaction, the new board of directors will be composed of the nine current Invitrogen board members and three additional members from the current Applera Board. Gregory T Lucier will continue to be chairman and CEO of the combined company, and Mark P Stevenson will remain president and COO.

''This transaction combines the industry's premier consumables provider with the industry's premier systems provider to create a world-class biotechnology tools company,'' said Lucier. ''With this acquisition, we are nearly doubling our consumables business as almost half of Applied Biosystems's revenues are consumable in nature. It also provides significant value creating opportunities for customers, shareholders and employees alike.''

Lucier continued, ''We expect to realize the benefits of this transaction quickly and efficiently with an integration roadmap that will focus on creating maximum value for the combined company. We are highly confident in the ability of the talent in the combined organization to deliver on our plans. Until the closing date, employees of each company will operate in a 'business-as-usual' mode to ensure continued execution of both Applied Biosystems's and Invitrogen's commitments.''

Tony L White, chairman and CEO of Applera, said, ''The Applera board, with the assistance of its independent financial advisors, has thoroughly reviewed a range of strategic alternatives. We are pleased this transaction provides attractive immediate value for Applera-Applied Biosystems shareholders as well as the ability to participate in future upside potential. It also enhances our ability to serve the needs of our customers and positions us for long-term success in the highly competitive and rapidly evolving life sciences field. I am pleased that the combined company will be led by such a capable and energetic team of executives.''

In pre-market electronic trading, Invitrogen shares dropped $2.80, or 6.5 percent, to $40.55. Applied Biosystems shares rose 13.7 percent to $36.89.

Invitrogen Corporation is a multinational biotechnology company headquartered in Carlsbad, California. It is one of the largest biotechnology companies in the world and declared revenues of $1.3 billion last year.

Applied Biosystems, Inc. is the original name of a pioneer biotechnology company founded in 1981 in Foster City, California, in the San Francisco Bay Area. Through the 1980s it operated independently and manufactured biochemicals and automated genetic engineering and diagnostic research instruments.

In 1993 Applied Biosystems was delisted from the NASDAQ when the old company known then as Perkin-Elmer acquired it. As the PE Applied Biosystems Division under that parent in 1998, it became consolidated with other acquisitions as the primary PE Biosystems Division. In 1999 its parent company reorganized and changed its name to PE Corporation, and the PE Biosystems Group again became publicly traded, as a tracking stock of its parent, along with its sister tracking stock company, Celera Genomics.

In 2000 the parent became Applera Corporation. The Applied Biosystems name also returned that year, in the name change of the tracking stock from PE Biosystems Group to Applera Corporation-Applied Biosystems Group, which remains as a publicly traded operating group within Applera Corp., along with its sibling operating group, Applera Corporation-Celera Group.