San Diego Business Journal

Life Technologies Said to Be Exploring Possible Sale

Monday, January 21, 2013

Life Technologies Corp. may be exploring a possible sale and has reportedly retained banks to assist in the process.

Stock shares surged Jan 18 for Life Technologies, San Diego’s largest biotechnology firm and third-largest public company, rising about 11 percent to $60.79 at market close on Jan. 18. It reached $61.86 around 10:30 a.m. EST – an all-time high since shares began being traded in 1999.

The Carlsbad-based laboratory equipment maker, whose value has risen to about $10.5 billion, has retained Deutsche Bank Securities Inc. and Moelis & Company LLC “to assist in its annual strategic review,” it said in a Jan. 18 statement released by its board of directors. They said they have not decided on any specific course of action.

A spokeswoman for Life Technologies declined to comment any further on the matter.

The company’s stock price soared after the Financial Post, a Canadian business publication, reported Jan. 17 that Life Technologies had begun a process last fall that could allow it to be acquired by either a private equity firm as part of a leveraged buyout or by a larger company.

The Financial Post reported that sources say they hope to complete the sale by mid-February. Life Technologies may discuss the matter when it releases its fourth quarter earnings on February 4.

According to the Financial Post, Deutsche Bank and Moelis advisers have approached at least four large private equity firms to determine any interest in purchasing Life Technologies. These include Blackstone Group LP, KKR & Co., TPG Global and Carlyle Investment Management — but analysts speculate that larger biotech firms like Swiss Roche Holding AG may also be interested in the acquisition.

Roche failed last year in a hostile bid for San Diego genetic sequencing company Illumina Inc. It backed off from a $6.7 billion deal because investors wanted more. Stock for Illumina dropped about 1 percent Jan. 18, ending at $51.03 per share.

Roche this month announced it has recruited a high-profile San Diegan: John C. Reed, who served as CEO of La Jolla-based Sanford-Burnham Medical Research Institute for 11 years. Reed will begin working at the company’s Basel, Switzerland headquarters beginning in April.

To acquire Life Technologies, JPMorgan analyst Tycho Peterson said that a strategic buyer would target a price of $65 to $75 per share, but Jon Wood, an analyst with Jefferies & Co., said that estimate is likely overblown.

“While price talk is apparently in the $65 to $75 range, our initial analysis suggests an LBO transaction valuing Life’s equity in the $50 to $60 range is more realistic in present market conditions,” Wood wrote in a research note Jan 18.

Life Technologies formed in 2008, following a merger between San Francisco-based Applied Biosystems Inc. and Carlsbad-based Invitrogen Corp. It holds more than 5,000 patents, and employs about 1,500 in the San Diego area and 10,000 companywide.

—Meghana Keshavan