31 Mar Fujifilm to acquire Cellular Dynamics International
FUJIFILM Holdings Corporation (President: Shigehiro Nakajima,) (TSE: 4901) (“Fujifilm”) and Cellular Dynamics International, Inc. (CEO: Robert J. Palay,) (NASDAQ: ICEL) (“CDI”), a leading developer and manufacturer of fully functioning human cells in industrial quantities to precise specifications, today announced that the two companies have entered into a definitive agreement whereby Fujifilm will acquire CDI via an all-cash tender offer to be followed by a second step merger. Fujifilm aims to acquire all issued and outstanding shares of CDI’s common stock for $ 16.5 per share or approximately $ 307 million (on a fully diluted basis). The offer represents a premium of 108% to CDI’s closing price on March 27. Upon completion of the transaction, CDI will continue to run its operations in Madison, Wisconsin and Novato, California as a consolidated subsidiary of Fujifilm. The announced transaction was unanimously approved by the Boards of Directors of both companies.
Under the terms of the agreement, Fujifilm will commence an all-cash tender offer no later than April 6, 2015. The transaction is conditioned on the tender achieving the minimum acceptance threshold, regulatory approvals and other customary conditions. Fujifilm will finance the transaction from the cash on its balance sheet and the completion of the acquisition is not subject to any financing conditions. It is anticipated that the tender offer will close during the second calendar quarter of 2015.
CDI was founded in 2004 and listed on NASDAQ in July 2013. The company had global revenues of $16.7 million in the year ended, December 31, 2014and had 155 employees as of December 31, 2014.
CDI’s technology platform enables the production of high-quality fully functioning human cells, including induced pluripotent stem cells (iPSCs), on an industrial scale. Customers use CDI’s products, among other purposes, for drug discovery and screening, to test the safety and efficacy of their small molecule and biological drug candidates, for stem cell banking, and in the research and development of cellular therapeutics. CDI’s proprietary iCell product catalogue encompasses 12 different iPSC based cell types, including iCell Cardomyocytes, iCell Hepatocytes, and iCell Neurons. During 2014 CDI sold to 18 of 20 top biopharmaceutical companies.
CDI’s technology platform was selected by the California Institute for Regenerative Medicine[1] to establish iPS disease cell banks. CDI recently announced the completion of 2 cGMP[2]-compliant iPS cell lines with HLA[3] types which may reduce the likelihood of transplant immune rejection. CDI also is developing iPS cells for preclinical studies focused on dry age-related macular degeneration4 for a National Eye Institute5 program.
Tapping into technologies and know-how accumulated as a result of leading the field of photographic films, Fujifilm has developed highly-biocompatible recombinant peptides[4] that can be shaped into a variety of forms for use as a cellular scaffold[5] in regenerative medicine[6] in conjunction with CDI’s products. Fujifilm has been strengthening its presence in the regenerative medicine field over several years, including by acquiring a majority of shares of Japan Tissue Engineering Co., Ltd. (J-TEC) in December 2014.
This acquisition of CDI will allow Fujifilm to gain entry into the area of iPS cell-based drug discovery support services. Fujifilm also plans to benefit from the combination of CDI’s iPS cell technology and experience and Fujifilm’s expertise in material science, engineering, and J-TEC’s quality management systems. The combination of these will help accelerate product development in regenerative medicine while expanding the commercial opportunities.
Commenting on the transaction, Shigetaka Komori, Chairman and CEO of Fujifilm, said, “We are delighted to be able to pursue the business from drug discovery to regenerative medicine with CDI, which develops and manufactures iPS cells. We have optimal scaffolding material, ‘recombinant peptides’, for cell generation and technologies useful for regenerative medicines such as material science and engineering. Our group company, Japan Tissue Engineering, markets regenerative medicine products in Japan. By welcoming CDI to the Fujifilm Group and by combining the technologies and knowhow of both companies, we will seek synergies and efficiencies to be more competitive in the field of drug discovery and regenerative medicine.”
Robert J. Palay, Chairman and CEO of CDI, added, “CDI has become a leader in the development and manufacture of fully functioning human cells in industrial quantities to precise specifications. CDI and Fujifilm share a common strategic vision for achieving leadership in the field of regenerative medicine. The combination of CDI’s technology with Fujifilm’s technologies, know-how, and resources brings us ever closer to realizing the promise of discovering better, safer medicines and developing new cell therapies based on iPSCs.”
Fujifilm has successfully transformed its business structure for growth by expanding from traditional photographic film to other priority business fields. Positioning the healthcare business as one of its key growth areas, Fujifilm is seeking to cover “prevention, diagnosis, and treatment” comprehensively.
Fujifilm will disclose the impact of the purchase on its consolidated financial results for the fiscal year ending March 2016 once said impact is determined.
Goldman, Sachs & Co. is acting as financial advisor to Fujifilm and Morrison & Foerster LLP is acting as its legal counsel. JP Morgan is acting as financial advisors to CDI and Sidley Austin LLP is acting as legal counsel.