Horizon Discovery PLC (LON:HZD) is to more than double its revenues through the acquisition of General Electric subsidiary Dharmacon, a deal that will propel it to the front rank of human gene technology.
Dharmacon is the acknowledged global leader in cell behaviour or RNAi products and is growing rapidly in gene editing, Horizon’s area of expertise.
In particular, Dharmacon is heavily used by the academic community and its acquisition gives Horizon’s research product and service offerings access to its e-commerce platform.
The enlarged group is expected to have a market share of approximately 4% in a market expected to be worth £1.6bn in 2018, though global demand for gene editing is tipped to grow at more than 30% for years.
The consideration is US$85mln, comprising US$50mln in cash and US$35mln in new Horizon shares.
A placing at 205p will raise £80mln to pay for the cash element and also provide additional funding.
The funding has been backed by major institutional shareholders Woodford and Perpetual, which between them will retain a 31.5% stake following the transaction. General Electric will own 8.8% of Horizon.
Dharmacon’s revenues were $36.7mln (£28mln) in 2016 and underlying profit [EBITDA] US$5.4mln.
Gene editing involves altering the biological codes that tell a cell how to behave.
Horizon designs and engineers genetically-modified cells that replicate mutations and are used in research into specific diseases and applications.
It boasts a catalogue of over 23,000 cell generation and application services and in combination with Dharmacon will be able to offer both gene-editing and gene modulation services to life science researchers.
Darrin Disley, Horizon's chief executive, said the acquisition of Dharmacon creates an emerging leader in the application of gene modulation technologies in life science research.
“Brand recognition, and sales, marketing (including eCommerce) and distribution channel particularly in the academic community as well as intimate relationships in Biotech and Pharma that Dharmacon will bring to Horizon, will transform the opportunity for Horizon's product portfolio."
Horizon also issued its own trading update and repeated sales this year will be in the region of £30-35mln.