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CombiMatrix Enters Into Merger Agreement with Invitae Corporation to be Acquired for $33 Million in Invitae Common Stock

$27 million offered to holders of CombiMatrix Common Stock (CBMX) subject to certain adjustments

IRVINE, Calif., July 31, 2017 (GLOBE NEWSWIRE) -- CombiMatrix Corporation (CBMX) (“CombiMatrix” or “the Company”), a family health molecular diagnostics company specializing in DNA-based reproductive health and pediatric testing services, announced that it has entered into a definitive merger agreement with Invitae Corporation (NVTA) (“Invitae”) to be 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.

The consideration payable to the holders of currently outstanding shares of CombiMatrix common stock, as well as currently outstanding Series F preferred stock, restricted stock units and in-the-money options, is $27 million, based on a fixed price per share of Invitae’s common stock of $9.49 and subject to an adjustment for “Net Cash” of CombiMatrix at closing. Net Cash, as defined in the merger agreement for this purpose, includes all current assets, less all current liabilities (including amounts payable pursuant to the Company’s executive severance plan) and capital lease obligations of the Company, less all transaction-related expenses including amounts owed to the Company’s strategic advisors, accountants and attorneys, less amounts owed to repurchase certain CombiMatrix common stock warrants, less amounts payable under the Company’s transaction bonus plan that was adopted on December 2, 2015 and less $250,000 stipulated for working capital purposes. Based on the Company’s current forecasts and estimates of Net Cash, and based on a fixed price per share of Invitae’s common stock of $9.49, the Company presently estimates that the CombiMatrix price per share received by CombiMatrix common stockholders would be between approximately $8.00 and $8.65. Because the value of the transaction to CombiMatrix stockholders is based on a fixed price per share of Invitae’s common stock of $9.49, the overall value of the merger consideration potentially to be received by CombiMatrix stockholders will fluctuate based on the market price of Invitae common stock between now and any closing. There are currently 2,918,726 shares of CombiMatrix common stock outstanding, and an additional 125,738 shares of CombiMatrix common stock issuable pursuant to currently outstanding Series F preferred stock, restricted stock units and in-the-money common stock options.

As part of the proposed acquisition, the merger agreement contemplates that Invitae will conduct an exchange offer in which holders of CombiMatrix Series F warrants will be offered approximately $6 million in shares of Invitae common stock, based on $2.90 per warrant and 2,067,076 Series F warrants currently outstanding, with such consideration also based on a fixed price per share of Invitae’s common stock of $9.49. Because the value of the transaction is based on a fixed price per share of Invitae’s common stock of $9.49, the overall value of the exchange offer consideration potentially to be received by CombiMatrix Series F warrant holders will fluctuate based on the market price of Invitae common stock between now and any closing. Under the terms of the merger agreement, holders of at least 90% of the Series F warrants outstanding must accept the exchange tender offer and tender their warrants to receive shares of Invitae common stock. If holders of less than 90% of outstanding Series F warrants tender, Invitae may elect to terminate the merger. Holders of Series F Warrants may exercise their warrants at any time prior to any closing of the merger if they so choose, and the merger agreement anticipates an increase in the consideration paid to CombiMatrix common stockholders as more shares of CombiMatrix common stock become outstanding as a result of such exercises. Based on a fixed price per share of Invitae’s common stock of $9.49 and subject to the Net Cash adjustment, the consideration potentially to be received by CombiMatrix common stockholders (including holders of shares issued upon the exercise of Series F warrants) could increase by approximately $15 million, if all Series F Warrants were exercised. The proposed merger is expected to close in the fourth quarter of 2017, but is subject to customary closing conditions, including CombiMatrix stockholder approval, as well as the warrant exchange participation threshold noted above.

Mark McDonough, President and Chief Executive Officer of CombiMatrix, stated, “We are excited about the prospect of joining forces with Invitae, one of...


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