Creating Market and Technology Leader in Molecular Diagnostics
Transaction Valued at Approximately US$1.6 Billion
Expected to be Accretive in 2008 to QIAGEN's Earnings Per Share
Venlo, The Netherlands and Gaithersburg, Maryland, USA - June 3, 2007
- QIAGEN N.V. (Nasdaq: QGEN; Frankfurt, Prime Standard: QIA) and
Digene Corp. (Nasdaq: DIGE) announced today a definitive agreement to
combine the two companies to create market- and technology-leadership
in molecular diagnostics. The Boards of Directors of both companies
unanimously approved the transaction in which QIAGEN is to acquire
100% of Digene's stock for a combination of cash and QIAGEN common
stock. This strategic transaction combines QIAGEN's leading
portfolio of sample and assay technologies, including a broad panel
of molecular diagnostic tests, with Digene's leadership in HPV
targeted molecular diagnostic testing, creating a global leader in
molecular diagnostics outside blood screening and viral load
monitoring. It is anticipated that the combined company will have
over US$350 million of molecular diagnostics revenues and more than
US$800 million in revenues overall in 2008.
Under the terms of the agreement, the transaction will be effected as
an exchange offer, followed by a merger of Digene into a subsidiary
of QIAGEN. The acquisition consideration will consist of cash and
QIAGEN stock, and Digene shareholders may elect to receive for each
Digene share either US$61.25 in cash or 3.545 shares of QIAGEN stock,
subject to pro-ration so that the total consideration issued for
Digene stock consists of 55% cash and 45% QIAGEN stock. Based on the
companies' closing stock prices on June 1, 2007, the US$61.25 per
share of consideration to be received by Digene shareholders
represents a premium of 37% and total equity consideration of
approximately US$1.6 billion, which includes US$170 million in cash.
It is anticipated that the stock portion of the consideration will be
tax-free to Digene shareholders and QIAGEN shareholders will own
approximately 78% of the combined company on a fully diluted basis,
and Digene shareholders will own approximately 22%.
QIAGEN is the world's leading provider of sample and assay
technologies for biological targets such as DNA, RNA and proteins.
Through its technology-leading positions as well as through catalytic
acquisitions, QIAGEN has created a molecular diagnostics franchise
which, with approximately US$150 million in annual sales, is one of
the largest in the industry. The company offers the world's broadest
portfolio of molecular diagnostic tests, which are available subject
to regulatory approval in many countries of the world.
Digene holds a unique leadership position in molecular diagnostics.
Digene's primary product, the Digene® HPV (human papillomavirus)
Test, screens for the presence of high-risk types of the virus that
have been shown to be the cause of cervical cancer. The Digene HPV
Test is the only test that is both FDA-approved and CE-marked for
HPV. This addresses one of the largest and most rapidly expanding
market segments in women's health and molecular diagnostics.
"The strategic rationale for this transaction is compelling as it
combines QIAGEN's leading technology portfolio and our breadth of
molecular diagnostic tests with Digene's leadership in what is seen
as the fastest-growing segment of molecular diagnostics," said Peer
M. Schatz, Chief Executive Officer of QIAGEN. "This transaction
creates significant value for our shareholders and instantaneous
market and technology leadership in what is one of the most exciting
areas of life sciences and healthcare: molecular diagnostics. The
joint franchises link virology with oncology, thereby creating an
exceptional platform to add next-generation and high-value molecular
diagnostic products and strategically position the company for future
growth.
"This transaction is an exciting and important next step for QIAGEN.
It is consistent with our strategy to expand our leadership in sample
and assay technologies. We are enthusiastic about the opportunity to
combine our complementary strengths and collective resources as one
company. This transaction provides us with many ways to drive
top-line and bottom-line growth, such as access to new channels with
existing and new products and combined technology, resources and
infrastructure to provide greater operating strengths. This
strategic transaction will be a catalyst for growth and, as such, we
do not anticipate significant changes in the combined company's
workforce. We look forward to delivering the significant benefits of
the combination to all of our shareholders and to working alongside
Digene's talented employees," Mr. Schatz continued.
Daryl J. Faulkner, Chief Executive Officer and President of Digene,
said, "This transaction provides our shareholders with immediate
value as well as a unique opportunity to participate in the
significant upside potential of a new entity that we believe will be
a global leader in molecular diagnostics. We are extremely proud of
the work we have done to develop and introduce the first HPV test to
be both FDA approved and CE-marked, and to build it into a business
with an annual run rate of over US$200 million in revenues. We look
forward to the enhanced opportunities that will result from this
merger, which will allow the combined company to expand its
geographic reach and offer a larger portfolio of products and
services to address a broad spectrum of needs.
"We are pleased to be able to build on the successful partnership we
have had with QIAGEN for more than a decade. We have collaborated on
various projects, such as our current Rapid Capture® System, which
QIAGEN co-developed and manufactures. By accelerating this existing
and productive working relationship, we anticipate future growth
opportunities and have already begun to develop new products," Mr.
Faulkner continued.
Value drivers for the combined entity include:
* Creates a market and technology leading player in
molecular diagnostics with over US$350 million of molecular
diagnostics revenues;
* Accretive to growth in revenues;
* Industry-leading sales channel with over 300 employees in
molecular diagnostics sales, over 1000 overall;
* Platform for expansion of assay portfolio and other growth
opportunities;
* Expands opportunities across diagnostics, applied testing,
pharma and research customers;
* Technology development and commercialization partners for
more than a decade;
* Similar cultures of focus and excellence;
* Rapid integration expected due to a long-standing
relationship and geographic proximity.
Value drivers for QIAGEN include:
* Digene's highly focused strategy in molecular diagnostics
(MDx) is a natural fit into QIAGEN's strategy;
* Significant value creation to QIAGEN shareholders and
contribution to QIAGEN's growth profile;
* Leadership in what is considered one of the most important
assays in MDx;
* HPV testing is fastest growing, large segment in MDx with
over US$1 billion market potential;
* Digene's leading IP positions in HPV - a virus with more
than 100 subtypes, of which approximately 13 are high-risk;
* HPV bridges QIAGEN's virology leadership into the
fast-growing oncology segment;
* The HPV assay creates unique value for QIAGEN's platforms
and assay breadth;
* Unique regulatory position - Digene has the only
FDA-approved test for HPV.
Value drivers for Digene include:
* Highly attractive consideration for Digene shareholders,
including option to benefit in upside potential;
* QIAGEN's unparalleled sample and assay technology breadth
creates opportunities for future;
* Adds key assay technologies such as multiplex (QIAplex),
PCR and isothermal technologies;
* Adds key sample technologies such as DNA processing from
cervical swabs;
* QIAGEN's broad assay portfolio creates new value for
Digene's customers;
* QIAGEN's global sales strength accelerates rapid global
rollout - including Asia;
* Can utilize QIAGEN's operations and infrastructure for
next phase of growth.
Both QIAGEN and Digene have strong leadership teams with proven
expertise in both molecular diagnostics and life sciences. With the
new platform of global infrastructure and scale, as well as extensive
R&D capabilities, the combined company is poised for immediate growth
as an industry leader. Both companies have talented and experienced
employees who have achieved high standards in innovation and service
to their customers and patients. The breadth and depth of both
companies' management teams and employees will be instrumental in
realizing the substantial upside potential of the combination.
Accretion
Based on preliminary analyses and assuming the transaction closes in
the August/September time period, QIAGEN expects this transaction to
contribute revenues of approximately US$58 to $60 million in the
fourth quarter 2007 and approximately US$260 to $270 million for the
full year of 2008. On an adjusted basis excluding one-time charges,
integration and restructuring costs and amortization of acquired IP
as well as equity based compensation (SFAS 123R), the acquisition is
expected to dilute QIAGEN's adjusted EPS by US$0.03 to $0.04 in the
fourth quarter 2007. It is anticipated that the transaction will be
accretive to QIAGEN's adjusted EPS in 2008 by US$0.02 to $0.04.
QIAGEN expects the transaction to be significantly accretive to
earnings thereafter.
Transaction Summary
* Merger agreement signed on June 3, 2007;
* Transaction expected to close in the August/September time
period;
* Pre-tax cost savings of approximately US$35 to US$45
million per year;
* Combination expected to add revenues of approximately
US$58 to $60 million in the fourth quarter 2007;
* Combination expected to incur customary one-time charges
at closing;
* Combination expected to add revenues of approximately
US$260 to $270 million in 2008;
* Combination expected to be accretive to QIAGEN's adjusted
EPS by US$0.02 to $0.04 in 2008 and significantly accretive
thereafter;
* Significant increase in QIAGEN's adjusted operating margin
expected in 2008 and thereafter;
* Rapid integration expected due to a long-standing
relationship and geographic proximity;
* QIAGEN has received financing commitments required to
complete the transaction.
About Cervical Cancer and HPV
HPV is a family of common viruses, of which more than 30 types are
transmitted through intimate (genital) skin-to-skin contact. The U.S.
Centers for Disease Control and Prevention estimates that 6.2 million
Americans acquire a new genital HPV infection every year and that 80%
of women will be infected by the age of 50. Digene markets the only
test that is both FDA-approved and CE-marked for detection of 13
high-risk types of HPV. Studies involving more than 200,000 women and
spanning four continents have shown that the sensitivity of the
Digene HPV Test is significantly higher than Pap (cytology) testing
alone. HPV testing is typically performed in the same laboratories in
which QIAGEN's products are used. In addition, the new combined
company will be uniquely positioned to facilitate HPV testing in
under-served regions in both industrialized and developing countries.
QIAGEN Management and Headquarters
Following the close of the transaction, Peer M. Schatz will remain
Chief Executive Officer of QIAGEN, Roland Sackers will remain Chief
Financial Officer of QIAGEN and Daryl J. Faulkner will serve as
co-head of the Integration Steering Committee. The combined company
will be called "QIAGEN" with its U.S. headquarters in Maryland.
Approvals and Time to Close
The transaction is subject to the tender of a majority of Digene's
common stock on a fully diluted basis, approval by QIAGEN's
shareholders, as well as customary closing conditions including
expiration of the applicable waiting period under the
Hart-Scott-Rodino Antitrust Improvements Act of 1976. The transaction
is expected to close in the August/September time period.
Digene Analyst Day
In light of today's announcement, the Digene Analyst Day, which was
previously scheduled to be held on June 5, 2007, will be rescheduled
for the combined company after the transaction is completed.
Advisors
In connection with the transaction, Goldman, Sachs & Co. is acting as
exclusive financial adviser to QIAGEN, and Mintz, Levin, Cohn,
Ferris, Glovsky and Popeo, P.C., De Brauw Blackstone Westbroek, and
Freshfields Bruckhaus Deringer are legal counsel. JP Morgan is
acting as financial adviser to Digene, and Ballard, Spahr, Andrews &
Ingersoll, LLP are legal counsel.
Conference Call / Webcast Information
Please join us on Monday, June 4, 2007, when QIAGEN and Digene will
host a conference call and webcast with investment analysts and
shareholders at 8:30 a.m. (Eastern Daylight Time) / 2:30 p.m.
(Central European Summer Time) to provide more information on this
announcement and respond to questions. The webcast and accompanying
slides can be accessed at www.qiagen.com and www.digene.com. An
audio archive of the call will be available on both companies' Web
sites.
Conference Call Dial-in: +1-888-562-3356 Domestic
+1-973-582-2700
International
Passcode:
8863042
Replay Dial-in: +1-877-519-4471 Domestic
+1-973-341-3080
International
Passcode: 8863042
Webcast Access: www.qiagen.com or www.digene.com
About QIAGEN
QIAGEN N.V., a Netherlands holding company is the leading provider of
innovative sample and assay technologies and products. QIAGEN's
products are considered standards in areas such pre-analytical sample
preparation and assay solutions in research for life sciences,
applied testing and molecular diagnostics. QIAGEN has developed a
comprehensive portfolio of more than 500 proprietary, consumable
products and automated solutions for sample collection, nucleic acid
and protein handling, separation, and purification and open and
target specific assays. The company's products are sold to academic
research markets, to leading pharmaceutical and biotechnology
companies, to applied testing customers (such as in forensics,
veterinary, biodefense and industrial applications) as well as to
molecular diagnostics laboratories. QIAGEN employs more than 1,900
people worldwide. QIAGEN products are sold through a dedicated sales
force and a global network of distributors in more than 40 countries.
In this press release QIAGEN is using the term molecular diagnostics.
The use of this term is in reference to certain countries, such as
the United States, limited to products subject to regulatory
requirements. Current QIAGEN molecular diagnostics products are 34 EU
CE IVD assays, six EU CE IVD sample preparation products, one 510k
PAX RNA product, nine China SFDA IVD assays and 98 general purpose
reagents. Further information about QIAGEN can be found at
www.qiagen.com.
About Digene
A leader in molecular diagnostics, Digene develops, manufactures and
markets proprietary DNA and RNA tests, with a focus on women's
health. The company's flagship product, the Digene® HPV Test, is the
only FDA-approved and CE-marked test for the detection of human
papillomavirus, the cause of essentially all cervical cancers.
Digene's product portfolio also includes tests for the detection of
other sexually transmitted infections, including chlamydia and
gonorrhea. Digene tests are marketed in more than 40 countries
worldwide. Headquartered in Gaithersburg, MD, Digene is traded on
NASDAQ under the symbol DIGE. For more information, visit
www.digene.com and www.theHPVtest.com.
Forward-Looking Statements
This communication contains certain forward-looking statements. These
forward-looking statements, which may include, but are not limited
to, statements concerning the financial condition, results of
operations and businesses of QIAGEN and Digene and the benefits
expected to result from the contemplated transaction, are based on
management's current expectations and estimates and involve risks and
uncertainties that could cause actual results or outcomes to differ
materially from those contemplated by the forward-looking statements.
Factors that could cause or contribute to such differences may
include, but are not limited to, the risk that the conditions
relating to the required minimum tender of Digene shares or
regulatory clearance might not be satisfied in a timely manner or at
all, risks relating to the integration of the technologies and
businesses of QIAGEN and Digene, unanticipated expenditures, changing
relationships with customers, suppliers and strategic partners,
conditions of the economy and other factors described in the most
recent reports on Form 20-F, Form 6-K and other periodic reports
filed with or furnished to the Securities and Exchange Commission by
QIAGEN and the most recent reports on Form 10-K, Form 10-Q, Form 8-K
and other periodic reports filed by Digene with the Securities and
Exchange Commission.
Additional Information
QIAGEN is filing today a Current Report on Form 6-K that will include
as exhibits the Agreement and Plan of Merger among QIAGEN, QIAGEN
North American Holdings, Inc., QIAGEN's merger subsidiary and Digene
Corporation. QIAGEN intends to file a Registration Statement on Form
F-4 and a Schedule TO, and Digene plans to file a
Solicitation/Recommendation Statement on Schedule 14D-9, with the
Securities and Exchange Commission in connection with the
transaction. QIAGEN and Digene expect to mail a Prospectus, which is
part of the Registration Statement on Form F-4, the
Solicitation/Recommendation Statement on Schedule 14D-9 and related
exchange offer materials, including a letter of election and
transmittal, to shareholders of Digene upon commencement of the
exchange offer. These documents contain important information about
the transaction and should be read before any decision is made with
respect to the exchange offer. Investors and stockholders will be
able to obtain free copies of these documents through the website
maintained by the Securities and Exchange Commission at www.sec.gov.
Free copies of these documents may also be obtained from QIAGEN, by
directing a request to QIAGEN's IR department at QIAGEN Strasse 1,
40724 Hilden, Germany, or from Digene, by directing a request to
Digene at 1201 Clopper Road, Gaithersburg, MD, 20878.
In addition to the Registration Statement on Form F-4, Schedule TO,
Prospectus, Solicitation/Recommendation Statement on Schedule 14D-9
and related exchange offer materials, both QIAGEN and Digene file or
furnish annual, quarterly and special reports, proxy statements and
other information with the Securities and Exchange Commission. You
may read and copy any reports, statements or other information filed
or furnished by QIAGEN or Digene at the SEC's Public Reference Room
at Station Place, 100 F Street, N.E., Washington, D.C. 20549. You can
request copies of these documents by writing to the SEC and paying a
fee for the copying cost. Please call the SEC at 1-800-SEC-0330 for
more information about the operation of the Public Reference Room.
QIAGEN's and Digene's SEC filings are also available to the public at
the SEC's web site at http://www.sec.gov, or at their web sites at
www.qiagen.com or www.digene.com.
Use of Non-GAAP Financial Measures
In addition to the financial measures prepared in accordance with
generally accepted accounting principles (GAAP), we use the non-GAAP
financial measure "adjusted EPS." Adjusted EPS excludes the write-off
and amortization of acquisition-related intangible assets, and tax
provisions/benefits related thereto. Adjusted EPS is not a measure
of operating performance under GAAP. We believe that the use of
adjusted EPS helps investors to gain a better understanding of our
core operating results and future prospects, consistent with how
management measures and forecasts our performance, especially when
comparing such results to previous periods or forecasts. When
analyzing our operating performance, investors should not consider
adjusted EPS as a substitute for net income per share prepared in
accordance with GAAP.
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Qiagen N.V.
Spoorstraat 50 KJ Venlo Netherlands
WKN: 901626; ISIN:
NL0000240000; Index: HDAX, MIDCAP, Prime All Share, TECH All Share,
TecDAX;
Listed: Prime Standard in Frankfurter Wertpapierbörse, Freiverkehr in
Börse Berlin Bremen,
Freiverkehr in Börse Düsseldorf, Freiverkehr in Hanseatische
Wertpapierbörse zu Hamburg,
Freiverkehr in Niedersächsische Börse zu Hannover, Freiverkehr in
Bayerische Börse München,
Freiverkehr in Börse Stuttgart;
