This excerpt taken from the SIAL 8-K filed Feb 16, 2005.
TO STRENGTHEN GENOMICS RESEARCH TOOLS PORTFOLIO
Sigma-Aldrich Corporation (Nasdaq: SIAL) announced today that it has signed a definitive agreement to acquire the Proligo Group (Proligo) from Degussa AG (Frankfurt: DGXG.DE). Terms of the proposed purchase were not disclosed.
Proligo, a global supplier of key genomics research tools including custom DNA, custom RNA and phosphoramidite raw materials used for DNA and RNA synthesis, had 2004 sales of approximately $40 million. Depending on the closing date for the transaction, as much as nine months of Proligos operating results will be added to Sigma-Aldrichs performance in 2005, increasing overall sales growth by roughly 2%.
The acquisition of Proligo is another key step in our strategy to provide tools that fully meet the research needs of scientists in the rapidly growing field of genomics, said David Harvey, Sigma-Aldrichs Chairman and CEO. Proligo will provide us with one of only four exclusive licenses to a key Massachusetts Institute of Technology patent application that covers the use of RNA in gene silencing, the new frontier in genomics research. Adding this capability to our previously-announced partnership with Ingex, L.L.C. to develop and market their revolutionary new gene disruption technology (TargeTron), our exclusive licensing arrangement with Rubicon in whole genome amplification (GenomePlex) and our own internal R&D activities enhances our position in the rapidly growing functional genomics market. We expect this investment to permit us to participate as a global leader in the genomics and gene silencing research tools markets for years to come.
Proligo is headquartered in Boulder, Colorado, and has manufacturing facilities in Boulder; Paris, France; Hamburg, Germany; Helios, Singapore; Kyoto, Japan; and Lismore, Australia. The company employs approximately 300 staff worldwide.
This acquisition complements our existing Sigma-Genosys business, assures a primary supply for the phosphoramidite raw materials from which synthetic DNA and RNA are made and expands our role in helping scientists unlock the promise of genomic research through the use of leading edge RNA and gene silencing tools, said David Julien, President, Sigma-Aldrich Biotechnology. We look forward to all that Proligo and its employees will bring to our combined success.
In announcing the proposed transaction, management reduced its previously-announced 2005 diluted earnings per share expectations of $3.45 to $3.55 to a new range of $3.40 to $3.50, to include dilution from the Proligo acquisition of approximately $0.05 per share due to non-cash impacts from purchase accounting adjustments including increases in the fair value of acquired inventory. This revised estimated range also assumes that currency exchange rates remain at December 31, 2004 levels throughout 2005, a 2005 effective tax rate of approximately 29%, and dilution of approximately $0.10 per share from the previously announced and pending acquisition of JRH Biosciences. The acquisition of Proligo is expected to be accretive to earnings after 2005 and to make a positive contribution to cash flow in 2005 and after.
Sigma-Aldrich expects to fund the acquisition with short term debt. Both Standard and Poors and Moodys considered the proposed transaction and its terms in recently reaffirming the Companys investment grade debt ratings. The Company fully expects to remain within its targeted debt to capital ratio of 30-35% after the acquisition.
The transaction has been approved by the boards of directors of both companies and, subject to regulatory approval in Germany and other customary terms and conditions, is expected to close early in the second quarter of 2005.
Bryan Cave LLP served as legal counsel to Sigma-Aldrich for this transaction.