Click here for an updated version of this story.
NEW YORK, Oct. 15 - Invitrogen said it will buy InforMax for $42 million.
The deal, set to close by the end of the year, throws the bruised bioinformatics company a lifeline, ensures its technology a beefier marketing presence, and gives Invitrogen technology it says will "simplify" many of its kits.
The sale "is in the best interest of InforMax's shareholders," said President and CEO Andrew Whiteley, who will become president of the newly acquired company. "By leveraging Invitrogen's strong global life sciences market presence, sales team, and marketing know-how, we believe this transaction will serve to accelerate the growth" of the firm's Vector NTI product.
"Our existing customers stand to benefit from the expanded range of products, services, and exceptional technical and scientific talent resulting from this merger," Whiteley added.
Lyle Turner, Invitrogen's president and CEO, added: "InforMax's software enhances our product line's value and technology platform even further. Vector NTI and the Vector family of products ... simplify the use of Invitrogen's kits for gene identification, cloning, expression, and analysis."
Both companies' boards have already approved the acquisition, which will call for the purchase of all of InforMax's outstanding shares for $1.36 apiece. Invitrogen will commence a tender offer within the next 10 days, the company said.
The acquisition comes at a critical time for InforMax. The company, like most of its compatriots in the bioinformatics space, has suffered in a market plagued by decaying customer interest and virulent competition. In recent months the company, based in Bethesda, Md., has been handed a deficiency letter from the Nasdaq exchange for failing to keep its share price above a minimum target.
In addition, second-quarter revenues have slumped, losses have mounted, and R&D spending has receded. The company also forecast it will record $3.1 million in third-quarter revenues, down 35 percent from the same quarter in 2001. Invitrogen, by comparison, had reported an increase in second-quarter revenue, though the firm, too, has trimmed its R&D budget. The company had $745 million in cash and cash equivalents as of June 30.
A conference call is scheduled for 11:00 a.m. Eastern time.