Investors in CombiMatrix Corp (NASDAQ:CBMX) are having a great day. Shares of the molecular diagnostics maker are up over 40% on the back of definitive merger agreement with InVitae Corp (NYSE:NVTA). CombiMatrix was acquired in an all-stock merger for approximately $33 million of combined consideration, based on a fixed price per share of Invitae’s common stock of $9.49 and subject to certain adjustments described below.
The merger has been approved by each company’s board of directors and is conditioned upon, among other things, approval by CombiMatrix’s stockholders, Invitae’s registration of common stock to be used to acquire CombiMatrix, and at least 90% participation in a warrant exchange offer as noted below. CombiMatrix engaged in a fifteen-month long market check with the assistance of its exclusive financial advisor. After the conclusion of that market check, CombiMatrix, assisted by its advisors, had months of negotiations with Invitae before entering into the definitive merger agreement.
Mark McDonough, President and Chief Executive Officer of CombiMatrix, stated, “We are excited about the prospect of joining forces with Invitae, one of the nation’s fastest-growing genetics information companies, to help achieve even higher levels of patient satisfaction, growth and shareholder value. At CombiMatrix, we have worked very hard to establish ourselves as a high-touch, patient-focused organization delivering the highest quality in reproductive health and pediatric diagnostic testing services. Over the past few years we have consistently increased our revenue, grown our customer base, improved gross margins and significantly reduced our operating loss despite capital constraints. By coming together with Invitae, we believe we can synergistically combine their scale, technology and expertise with the CombiMatrix product offering, human capital and sales channels to achieve even greater success in the future for the company and our shareholders.”
Sean George, Chief Executive Officer of Invitae, stated, “For many people, preparing to have a child is their introduction to the power of genetics to inform health decisions. The combination of Invitae and CombiMatrix will expand our ability to provide actionable answers to the complex questions that can arise when starting a family. CombiMatrix’s expertise in miscarriage analysis and assisted reproduction, deep relationships with perinatal specialists and established technologies will round out Invitae’s capabilities, creating a comprehensive platform to further accelerate the use of genetic information in mainstream medical care.”
On the ratings front, Aegis analyst Ben Haynor initiated coverage with a Buy rating on CBMX and a price target of $8.00, in a report issued on July 13. The current price target represents a potential upside of 62% from where the stock is currently trading. According to TipRanks.com, Haynor has a yearly average loss of 0.5%, a 39% success rate, and is ranked #3381 out of 4627 analysts.
CombiMatrix Corp. engages in the provision of clinical diagnostic services. It offers cytogenomic testing for preimplantation genetic testing, prenatal diagnosis, miscarriage analysis, and pediatric developmental disorders.