NEW YORK (GenomeWeb News) – StemCells has inked a definitive agreement to acquire Stem Cell Sciences in a deal worth around $4.8 million.
The transaction will provide StemCells, which is focused on developing tissue-derived cellular products for therapeutic uses, with cell-based drug discovery technologies. Among the products StemCells gains through the deal are automated systems for production and manipulation of stem and progenitor cells, gene insertion technology for drug screening and for applications in cell and gene therapy, the SC Proven media formulation and reagent business, and SCS' licensing deals with firms, such as Merck and Millipore.
Palo Alto, Calif.-based StemCells will pay SCS 2.65 million shares of its common stock, worth around $4.1 million based on its Friday closing price of $1.56 on the Nasdaq. In addition, StemCells will provide SCS with $715,000 in cash as a loan for working capital purposes. StemCells said that upon completion of the acquisition it will waive certain loan obligations of SCS to repay the $715,000.
The total number of shares delivered to SCS will depend on the acquired subsidiaries of SCS having at least an agreed-upon target amount of working capital. A portion of the shares will be held in escrow for release in 12 months, said StemCells.
"This proposed acquisition will combine three distinct stem cell platforms, adult, embryonic and iPS cells, for both therapeutic and drug discovery applications, and will position StemCells to diversify and pursue near-term commercialization opportunities while continuing to develop our cell-based therapeutic products," StemCells President and CEO Martin McGlynn said in a statement.
The firms said that members of the SCS board and other significant stockholders representing more than 30 percent of SCS' outstanding shares have agreed to vote in favor of the deal, which is expected to close in two months. Approval by StemCells' shareholders is not required.