WaferGen Bio-Systems Soars 60% Following Acquisition Announcement; Terms Of The Deal Imply Further Significant Upside

WaferGen Bio-systems, Inc. WGBS, a nano-cap company that focuses on stem cell research, announced on Friday that it has agreed to sell itself to Takara Bio USA Holdings, a global biotechnology and life sciences company.

As part of the agreement, Takara Bio will acquire WaferGen for an aggregate cash purchase price that will be based on a multiple of 1x to 3.5x WaferGen's 2016 calendar revenue with a maximum price capped at $50.0 million. Under a best case scenario for WaferGen's shareholders, Takara Bio will apply a 3.5x multiple if the company's revenues exceed $9.0 million.

Shares of WaferGen were trading higher by nearly 70 percent at $0.92 after one hour of trading on Friday. At that time, the stock's trading price implied a valuation of around $16.18 million

The merger is expected to be close after WaferGen's audited financial statements are submitted and evaluating in February or March of next year.

"WaferGen's technologies and broad array of rapidly growing product offerings are providing a powerful set of tools for biological analysis at the molecular and single-cell level in the life sciences, pharmaceutical, and clinical laboratory industries," said Rollie Carlson, President and CEO of WaferGen. "I'm confident that through this merger we will cement a leadership position in the genomics research market and our combined solutions will accelerate breakthrough scientific and medical discoveries worldwide."

"The combination of TBUSA's RNA-seq and T Cell Receptor (TCR) profiling technologies with WaferGen's ICELL8 platform for isolation and processing of single cells will significantly expand our offering in the fast-growing single-cell and immuno-sequencing markets, and give customers greater access to these products through our global and commercial reach," said Carol Lou, President of TBUSA. "WaferGen's technologies are highly complementary to our reagent portfolio and the combination presents new opportunities for us in genetic analysis including clinical and applied markets."