Roche invests in Foundation Medicine collaboration

Swiss drug major Roche (ROG: SIX) and USA-based Foundation Medicine (Nasdaq: FMI) have entered into a broad strategic collaboration, worth a total of over $1 billion.

Under the terms of the contemplated transaction, as well as taking a majority stake in the company, Roche will invest $250 million in FMI at a per share issuance price of $50 (5 million shares) to fund FMI operations and development. In addition, Roche will commence a tender offer at a per share price of $50, which, when combined with Roche’s direct investment in FMI, will result in Roche owning a minimum of 52.4% and a maximum of 56.3% of FMI on a fully diluted basis. The offer price constitutes a 109% premium over the closing price of January 9.

Roche has acquired a majority interest in FMI of up to 56.3% on a fully diluted basis through a tender and acquisition of newly issued shares. Roche will tender for about 15.6 million Foundation Medicine shares at $50 per share with an aggregate tender value of around $780 million.