Roche and Foundation Medicine, Inc. (FMI) have entered into a definitive merger agreement for Roche to acquire the outstanding shares of FMIs common stock not already owned by Roche and its affiliates at a price of USD 137.00 per share in cash. This corresponds to a total transaction value of USD 2.4 billion on a fully diluted basis, and a total company value of USD 5.3 billion on a fully diluted basis. This price represents a premium of 29 per cent to FMIs closing price on 18 June 2018 and a premium of 47 per cent and 68 per cent to FMIs 30-day and 90-day volume weighted average share price on 18 June 2018, respectively.
The merger agreement has been unanimously approved by the board of Roche and a Special Committee of the independent directors of FMI and by its full board of directors with the Roche designated directors abstaining from the deliberations and vote. All current members of the FMI board have indicated that they intend to tender their FMI shares in the tender offer.
Daniel ODay, CEO Roche Pharmaceuticals, said, This is important to our personalised healthcare strategy as we believe molecular insights and the broad availability of high quality comprehensive genomic profiling are key enablers for the development of, and access to, new cancer treatments. We will preserve FMIs autonomy while supporting them in accelerating their progress.
Foundation Medicine, based in Cambridge, Massachusetts, is a market leading molecular information company dedicated to a transformation in cancer care, where each patients treatment is informed by a deep understanding of the molecular changes that contribute to their disease. Their services include a full suite of comprehensive genomic profiling (CGP) assays to identify the molecular alterations in a patient's cancer and match them with relevant targeted therapies, immunotherapies and clinical trials.
Foundation Medicine and Roche share the philosophy that every cancer patient should have access to personalized care informed by validated molecular information. Joining forces with Roche as an independent operating company allows Foundation Medicine to continue its collaboration with Roche, as well as our biopharma partners, to drive ubiquitous access to CGP testing and innovative data services, said Troy Cox, chief executive officer for Foundation Medicine.
Under the terms of the merger agreement, Roche will promptly commence a tender offer to acquire all of the outstanding shares of FMIs common stock not already owned by Roche at a price of USD 137.00 per share in cash. The closing of the tender offer will be subject to a majority of FMIs outstanding shares not already held by Roche being tendered in the tender offer. In addition, the transaction is subject to other customary closing conditions.
Following completion of the tender offer, Roche will acquire all remaining shares at the same price of USD 137.00 per share through a second step merger. The closing of the transaction is expected to take place in the second half of 2018.
Citi is acting as financial advisors to Roche and Davis Polk & Wardwell LLP is acting as legal counsel to Roche. Goldman Sachs & Co. LLC is acting as financial advisor to the FMI Special Committee and Goodwin Procter LLP is acting as legal counsel to the FMI Special Committee.
Foundation Medicine is a molecular information company dedicated to a transformation in cancer care in which treatment is informed by a deep understanding of the genomic changes that contribute to each patient's unique cancer.
Roche is a global pioneer in pharmaceuticals and diagnostics focused on advancing science to improve peoples lives. The combined strengths of pharmaceuticals and diagnostics under one roof have made Roche the leader in personalised healthcare a strategy that aims to fit the right treatment to each patient in the best way possible.