If You Invested $1,000 When Illumina Acquired Solexa, Here's How Much You'd Have Now

Genome sequencing company Illumina Inc ILMN has transformed its business over the years with a handful of acquisitions and new product launches. An acquisition in 2006 was one of the most important in company history and also rewarded investors along the way.

What Happened: Illumina announced on Nov. 13, 2006, that it would acquire publicly traded Solexa Inc. in a stock-for-stock merger. The deal price at the announcement was $600 million.

Solexa developed a proprietary, next-generation genetic analysis system to use in genome sequencing. Solexa got its start as a “blue-sky” idea from two University of Cambridge scientists. A company was eventually formed and used drafts of the human genome and DNA research to form the basis of a new DNA sequencing approach.

In 2006, Solexa launched the first genome analyzer. At the time of the acquisition, Illumina called genome sequencing a $1 billion market opportunity.

“Together, Illumina and Solexa will create the only company with genome-scale technology for genotyping, gene expression and sequencing, the three cornerstones of modern genetic analysis,” the company said.

Solexa has become an important part of Illumina’s products and technology and could power the company into the future.

“Solexa was acquired by Illumina in early 2007. In the intervening years, numerous microbe, plant, human and animal genomes have been sequenced with this technology. Next-generation sequencing data output has increased at a rate that outpaces Moore’s law — more than doubling each year,” Illumina said on its website.

Related Link: Why Jim Cramer Likes Illumina And Enterprise Products Partners 

Investing $1,000: Investors who saw the future of genome sequencing and the potential it had could have been pleasantly rewarding by parking some cash in shares of Illumina.

On the day of the Solexa acquisition news, Illumina shares traded at a high of $20.62, adjusted for a 2:1 split in 2008. A $1,000 investment could have purchased 48.50 shares of Illumina.

The $1,000 investment in Illumina would be worth $20,554.30 today based on a price of $423.80 a share at the time of writing.

A $1,000 investment in Illumina would have returned 1,955% over a 15 year period, marking an average annual increase of around 130%.

After an impressive 998% return in the past 10 years and 120% return in the past five years, Illumina shares are down 5% in the last year.

Illumina remains one of the largest genome sequencing companies on the market.

Photo: Courtesy of Illumina, Inc.

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