Wednesday, June 18, 2008

Invitrogen + Applied Biosystems

It looks like the merger & acquisition activity is starting to heat up. One deal that looks very interesting is the acquisition of Applied Biosystems (Ticker: ABI) by Invitrogen (Ticker: IVGN). Invitrogen is paying $38 in cash and stock. As long as Invitrogen stock stays within the band of $43.69 to $46; you’ll end up with ~ $38 when the deal closes. The value of the deal can be higher or lower than $38 based on the stock price of Invitrogen. Basically, every dollar move in Invitrogen will result in a $0.46 move in Applied Biosystems stock. Some analysts are skeptical about this deal, but I see this as a plus plus for both companies. Invitrogen is not overpaying for this company and it’s going to add to earnings over time. This will create a nice one stop shopping for many researchers.


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