The acquisition, which will marry ParAllele's genotyping assays and Affy's GeneChip platform, is expected to close in the third quarter of 2005.
"The potential for ParAllele's technology goes far beyond genotyping," said Stephen Fodor, CEO of Affymetrix, in a statement. "We will combine both companies' technologies to accelerate discovery and product development in a wide variety of areas, from basic research to the clinic."
The acquisition grew out of a long-standing collaboration between the two firms. In 2003, Affy began providing its GeneChip platform for use with ParAllele's genotyping assays, which are based on its Molecular Inversion Probe technology - a process that enables up to tens of thousands of reactions to be multiplexed in a single tube.
Last year, Affy and ParAllele extended the collaboration into a distribution partnership under which ParAllele agreed to design assays for Affymetrix to market for use with the GeneChip platform.
Earlier this year, ParAllele announced plans to partner with Eli Lilly and Genaissance to design and market its upcoming MegAllele DME-T assay panel, which will run on Affy's platform and will test around 160 genes that are involved in drug metabolism and transport pathways.
Affymetrix said it expects the acquisition of ParAllele to be "financially neutral" to its operating results in 2006 and accretive to net income in 2007.
The company expects to incur a merger-related charge of around $15 million in fiscal 2005 for in-process R&D, as well as operational charges in the range of $4 million to $7 million. These operational charges include non-cash amortization of about $2 million.