QIAGEN Completes Management Buyout of its Synthetic DNA Business Unit
QIAGEN to Keep its siRNA Business and to Retain Preferred Access to Synthetic DNA Supply
Qiagen N.V. announced that it has sold its synthetic DNA business to a management team previously employed at QIAGEN and which operated parts of this business. The new company is backed by private investors and QIAGEN will retain a minority stake of 16%. The new company, to be named Operon Biotechnologies Inc., expects to continue to expand the leadership position QIAGEN has built in this market. QIAGEN will retain all rights and activities in its leading siRNA business including ownership of QIAGEN's proprietary TOM- amidite chemistry.
Pursuant to the terms of the agreements, QIAGEN will retain a minority equity ownership of 16% in Operon Biotechnologies and, in addition, receive a consideration of approximately US$ 24.3 million, of which approximately US$ 17.8 million are in cash and the remainder in a promissory note. In addition, QIAGEN will receive preferred access to Operon Biotechnologies' synthetic nucleic acid manufacturing capacities as well as preferred purchasing rights. QIAGEN also has the exclusive right to utilize these highly efficient manufacturing capacities and the value of their continued improvements for contract manufacturing of siRNA products that QIAGEN will continue to market.
QIAGEN's synthetic DNA business primarily consists of business built organically and business added through the acquisitions of Operon Technologies Inc. in Alameda, California in 2000 and the Sawady Group in Tokyo in April 2001.
The resulting business unit, with operations in the US, Germany and Japan focused on providing custom oligonucleotides, and, increasingly, shelf products such as array ready oligo sets (AROS). QIAGEN had issued a total of approximately 3.7 million common shares to acquire these businesses. While QIAGEN is selling majority ownership in these business activities, QIAGEN believes that significant value is retained at QIAGEN through the preferred access and preferred terms. Based on forecasts for this business, it was expected to contribute approximately 10% of QIAGEN consolidated net sales and approximately 7% of its operating profit in the second half of fiscal 2004.
The transaction is effective from end of June at which time QIAGEN accounts for these business activities as a minority, passive investment and as a result, ceases to reflect their revenues and operating income as of such date.
The management team leading the buyout is headed by Patrick A. Weiss. Patrick A. Weiss was the founder of Xeragon Inc, which QIAGEN acquired in 2002 and is an expert in nucleic acid chemistry and chemical synthesis operations. QIAGEN believes this transaction will strongly benefit the company as QIAGEN retains key preferred access rights to the technology and product platform as well as preferred purchasing rights while at the same being able to strongly focus on its very attractive core business.
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