Under the merger agreement, Solexa's stockholders will receive shares of Illumina common stock valued at $14 per Solexa share. 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.
Solexa has developed a genetic analysis system for use in whole genome sequencing, targeted resequencing, digital gene expression and microRNA analysis.
Illumina commented that the market opportunity in sequencing is estimated at $1 billion, creating a market opportunity for the combined company in excess of $2.25 billion. The company also said the deal would create the only company with genome-scale technology for genotyping, gene expression and sequencing.
“This unique genetic analysis portfolio addresses the fastest growing segments of the life sciences market and will speed our customers' quest to understand, cure and ultimately prevent disease,” said Jay Flatley, president and CEO of Illumina.
The merger 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.