NEW YORK (GenomeWeb News) - Applera said yesterday that it has hired investment bank Morgan Stanley to advise the company as it considers restructuring its Applied Biosystems and Celera groups, which are currently traded as tracking stocks under the parent firm.
Applera said it will explore alternatives to its current structure, and will look into “creating two independent publicly traded companies in place of the two tracking stocks.”
ABI markets instruments, consumables, software, and services for the research and applied markets. Celera, originally formed to sequence the human genome, has evolved into a molecular diagnostics firm.
"We regularly review Applera's corporate structure, and in view of Celera's continued strong financial progress, we believe the time is now right to explore alternatives to our tracking stock structure, including the possibility of creating two independent publicly traded companies in place of the two tracking stocks," said Applera CEO, president, and chairman Tony White.
"While the tracking stock structure has facilitated the interests of both Celera and Applied Biosystems,” White added, “the evolution of our businesses makes it timely to explore the potential benefits of these businesses going their separate ways."
Applera’s board of directors also has nearly doubled its share repurchase authorization for ABI’s stock to $1.2 billion, which represents around 20 percent of the company’s outstanding common stock.
Through that repurchase, Applera expects to buy $600 million shares either through a tender offer or an accelerated share repurchase, the company said.
The balance of that deal will come “from open market purchases or privately negotiated transactions” over the next year to year and a half, the company said.
"The substantial increase and acceleration of the Applied Biosystems share repurchase program reflects our confidence in its business outlook and our belief that its shares continue to be undervalued in the market,” added White.
White also said ABI’s “strong cash position” makes the share repurchase program “an effective way to return value to shareholders.”
ABI’s stock closed yesterday at $32.37, and Celera’s closed at $12.43.