Illumina’s $8bn Acquisition of GRAIL

By Vinay Naik (University of Warwick), Roshni Padhi, Amarins Laanstra-Corn and Winston Shum (Stanford University)

 

Overview of the deal


Acquirer: Illumina

Target: GRAIL

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)

EV: $43.13B

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

Estimated Val