Roche, Basel, Switzerland, and Foundation Medicine Inc (FMI), Cambridge, Mass, have announced a definitive merger agreement for Roche to acquire the outstanding shares of FMI’s common stock not already owned by Roche and its affiliates at a price of  $137 per share in cash. The share price corresponds to a total transaction value of $2.4 billion on a fully diluted basis, and a total company value of $5.3 billion on a fully diluted basis. The price represents a premium of 29% over FMI’s closing price on June 18, 2018, and a premium of 47% and 68% over FMI’s 30-day and 90-day volume weighted average share price on June 18, 2018, respectively.

Approval of the merger agreement was unanimous from the board of Roche, a special committee of the independent directors of FMI, and the full FMI board of directors, with the Roche-designated directors abstaining from the deliberations and vote. All current members of the FMI board indicated they intend to tender their FMI shares in the tender offer.

“This is important to our personalized healthcare strategy, as we believe molecular insights and the broad availability of high-quality comprehensive genomic profiling are key enablers for the development of, and access to, new cancer treatments,” says Daniel O’Day, CEO of Roche Pharmaceuticals. “We will preserve FMI’s autonomy while supporting them in accelerating their progress.”

FMI is a molecular information company dedicated to a transformation in cancer care where each patient’s treatment is informed by understanding the molecular changes that contribute to their disease. Available services include a full suite of comprehensive genomic profiling (CGP) assays to identify the molecular alterations in a patient’s cancer and match them with relevant targeted therapies, immunotherapies, and clinical trials.

“Foundation Medicine and Roche share the philosophy that every cancer patient should have access to personalized care informed by validated molecular information,” says Troy Cox, CEO at FMI. “Joining forces with Roche as an independent operating company allows Foundation Medicine to continue its collaboration with Roche, as well as our biopharma partners, to drive ubiquitous access to CGP testing and innovative data services.”

Under the terms of the merger agreement, Roche will promptly commence a tender offer to acquire all the outstanding shares of FMI’s common stock not already owned by Roche at a price of $137 per share in cash. The closing of the tender offer will be subject to the tendering of a majority of FMI’s outstanding shares not already held by Roche in the tender offer. In addition, the transaction is subject to other customary closing conditions.

Following completion of the tender offer, Roche will acquire all remaining shares at the same price of $137 per share through a second step merger. The transaction is expected to close during the second half of 2018.

To learn more, visit Roche and Foundation Medicine.