General Electric Co. said Friday its healthcare unit will buy diagnostics company Clarient Inc. in a deal aimed at speeding its expansion into cancer diagnostic and therapy selection tools.
GE Healthcare officials say the deal will help them build a $1 billion–plus business developing integrated diagnostic solutions for cancer and other diseases.
GE said it will start a cash tender offer to pay $5 per share for Clarient common stock, a 34 percent premium over their closing price on Thursday, and $20 for each preferred share.
GE said the deal values Clarient at about $580 million, net of cash and investments. A spokeswoman declined to offer a breakdown on how much the share purchases would cost.
But Safeguard Scientifics Inc., which owns a 26 percent stake in Clarient, said the deal values Clarient at $587 million.
Clarient, which is based in Aliso Viejo, Calif., was founded in 1996 as MicroVision Medical Systems. It developed and made digital microscopes to analyze tissue and blood samples before it refocused on cancer diagnostic services.
Clarient board members have approved the deal and recommend stockholders tender their shares. Safeguard expects to receive about $145 million in sale proceeds for its stake in Clarient.
The transaction is expected to close later this year or in early 2011.
JP Morgan (News - Alert) is acting as financial adviser and Sidley Austin LLP is acting as legal counsel for GE Healthcare.
Clarient shares jumped $1.24, or 33 percent, to $4.98 in Friday morning trading, while GE stock slipped 4 cents to $16.06. Safeguard shares rose $1.05, or more than 7 percent, to $14.75.