By Vinay Naik (University of Warwick), Roshni Padhi, Amarins Laanstra-Corn and Winston Shum (Stanford University)
Overview of the deal
Total Transaction Size: $8B
Date Announced: September 21, 2020
Acquirer Advisor: Goldman Sachs
Target Advisor: Morgan Stanley
Illumina’s eight billion-dollar acquisition of GRAIL is a landmark deal in the biotechnology space. GRAIL will receive $3.5 billion in cash and $4.5 billion in Illumina stock, and the deal will pave the way for Illumina to lead the cancer screening and detection industry. Illumina has the power to accelerate the commercialization process of GRAIL’s test by leveraging its manufacturing experience and global scale, and the acquisition is also vertical as Illumina supplies the sequencers that Grail uses when performing its tests. GRAIL also contributes to the diversification of Illumina’s product offerings, as the NGS oncology market is projected to grow to $75 billion by 2035, at a CAGR of 27%.
“Over the last four years, GRAIL’s talented team has made exceptional progress in developing the technology and clinical data required to launch the GalleriTM multi-cancer screening test. Galleri is among the most promising new tools in the fight against cancer, and we are thrilled to welcome GRAIL back to Illumina to help transform cancer care using genomics and our NGS platform” — Francis deSouza, Illumina’s President and Chief Executive Officer.
Company Details: Acquirer - Illumina
Illumina is a global leader in DNA sequencing, developing and manufacturing products that impact the life sciences, oncology, and health segments. Its customers include academic, government, pharmaceutical, and biotechnology firms around the world.
Founded in 1998, headquartered in San Diego, California
CEO: Francis deSouza
Number of employees: 8,000
Market Cap: $45.31B (as of 01/10/2020)
LTM Revenue: $3.351B
LTM EBITDA: $1.108B
LTM EV/Revenue: 12.87
LTM EV/EBITDA: 38.93
Company Details: Target - GRAIL
GRAIL is a healthcare company focused on fighting cancer at early stages with the help of next-generation sequencing and state-of-the-art computer science algorithms. Using liquid biopsies, its technology can identify several types of cancers and where they are located in the body, with a false positive rate of less than one per cent. Its investors include Amazon CEO Jeff Bezos, Bill Gates, and Illumina.
Founded in 2016, headquartered in Menlo Park, California
CEO: Hans Bishop
Number of employees: est. 440