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Venaxis Merges With Strand Life Sciences

NEW YORK (GenomeWeb) – Diagnostics developer Venaxis announced after the close of the market today that it will merge with privately held genomics company Strand Life Sciences.

Once the transaction is fully completed, Strand's shareholders will own approximately 68 percent of the combined company, while Venaxis shareholders will own the remaining 32 percent. Due to existing tax laws and financial regulations in India, where Strand is based, the deal is being structured in two parts: First, Venaxis will purchase Strand's shares from its shareholders, and then Strand's shareholders will immediately re-invest those proceeds into Venaxis common stock, the company said in a statement.

The deal will be completed in two closings. The first will occur after Venaxis shareholders approve the deal, after which Venaxis will own a majority of Strand's shares, will change its name to Strand Life Sciences, and will changes its stock symbol on the Nasdaq. The second closing to finish off the deal will occur six months after the first.

After the first closing, Strand's Co-founder and current Executive Chairman Vijay Chandru will serve as executive chairman of the combined company's board, while Venaxis CEO Steve Lundy will serve as the company's CEO. The combined board will consist of four members from Strand and three from Venaxis.

Further terms of the deal were not disclosed.

The merger is part of a strategy Castle Rock, Colorado-based Venaxis started in early 2015, the company said. It has also started looking for a partner to develop and commercialize its appendicitis test portfolio.

"We are pleased to announce this transaction and are excited by the significant opportunity we believe it presents for shareholders of Venaxis and Strand LS," Lundy said in a statement. "The combined company will benefit from Strand Life Sciences' 15-year successful history of technological expertise in genomic profiling, bioinformatics, and data curation.

"Our initial focus will be to improve patient outcomes through the use of the StrandAdvantage pan-cancer gene panel, which was commercially launched in the United States in 2015," he added. "The combined company is expected to be focused on the continued commercialization of StrandAdvantage, as well as the development of additional oncology-related diagnostics."

Venaxis' shares rose 22 percent to $.31 in after-hours trading on the Nasdaq.