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Illumina to Acquire GRAIL for USD 8bn in Cash and Stock
Tuesday 22 September 2020

California-based genetic variation systems developer Illumina, Inc. (NASDAQ: ILMN) has agreed to acquire California-based healthcare company GRAIL, focussed on multi-cancer early detection, for a cash and stock consideration of USD 8bn, to launch new era of cancer detection, the company said.

Under the terms of the agreement, at closing, GRAIL stockholders (including Illumina) will receive total consideration of USD 8bn, consisting of USD 3.5bn in cash and USD 4.5bn in shares of Illumina common stock, subject to a collar. Illumina currently holds 14.5% of GRAIL's shares outstanding, and approximately 12% on a fully diluted basis.

The collar on the stock consideration will ensure that GRAIL stockholders, excluding Illumina, receive a number of Illumina shares equal to approximately USD 4bn in value if the 20-trading-day volume weighted average price of Illumina stock as of 10 trading days prior to closing is between USD 295 and USD 399.

The cash consideration to GRAIL stockholders excluding Illumina of approximately USD 3.1bn is expected to be funded using balance sheet cash of both Illumina and GRAIL plus up to USD 1bn in capital raised through either a debt or equity issuance. In advance of this anticipated issuance, Illumina has obtained financing commitments for a USD 1bn bridge facility with Goldman Sachs Bank USA.

GRAIL is developing the technology and clinical data required to launch the Galleri multi-cancer screening test, which is among the most promising new tools in the fight against cancer.

GRAIL was founded by Illumina in 2016 and was spun out as a standalone company, powered by Illumina's NGS technology, to develop data science and machine learning and create the atlas of cancer signals in the blood, enabling multi-cancer early detection tests.

Goldman Sachs and Co. LLC is serving as exclusive financial advisor and Cravath, Swaine and Moore LLP is serving as legal advisor to Illumina. Morgan Stanley and Co. LLC is serving as exclusive financial advisor and Latham and Watkins LLP is serving as legal advisor to GRAIL.
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Date Published: 22/09/2020

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