Iceland's deCode to acquire MediChem Life Sciences for $83.6 million

Iceland's deCode Genetics has signed an agreement to acquire MediChemLife Sciences of the USA, which is described as "a pioneer in providing drug discovery and development services to the biopharmaceutical industry," in a stock deal valuing the latter at around $83.6 million. Under the terms of the deal, which is expected to close in the second quarter of this year, MediChem's stockholders will receive 0.3099 shares of newly-issued deCode stock in exchange for each share in the firm they currently own.

Using deCode's stock price at the close of business on January 7, this translates to a purchase price of $3.04 per share (or a premium of 29% to MediChem's closing price on the same day) and, on a pro forma basis, the latter's stockholders will own around 15.7% of the combined company. The merger is subject to the usual regulatory and shareholder approvals, but the Reykjavik-headquartered group noted that it has entered into an agreement with certain shareholders of MediChem, which hold 63% of the voting rights of the company's outstanding common stock, under which the latter have given their support to the deal.

The merger will provide deCode with state-of-the-art research facilities, including the US group's 100,000 square-foot discovery center in Woodridge, Illinois and its 40,000 square-foot development center in Lemont, also in Illinois. Also included in this acquisition are MediChem's three wholly-owned subsidiaries: ThermoGen, which specializes in protein expression and biocatalysis; Emerald BioStructures, which is focused on high-throughput structural proteomics; and Advanced X-Ray Analytical Services.