Monday, November 19, 2018

Pacific Biosciences Bows Out Gracefully

After many frustrating years of commercial execution lagging the potential of the technology, Pacific Biosciences (PACB) (“PacBio”) investors have a reason to be a little more cheerful this Friday. After the close on Thursday, the company and Illumina (ILMN) announced that Illumina would buy the company in a cash deal for $8/share, a roughly 75% premium to Thursday’s close and the highest price for the shares since late 2016.

I expect at least some PacBio shareholders to be disappointed with this sale, as there certainly are arguments supporting a much larger market down the road for long-read sequencing, and PacBio has been making progress on commercial execution. Even so, I think this is a decent exit valuation, but also a good opportunity for Illumina to add long-read sequencing technology to complement its very strong position in short-read sequencing.

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Pacific Biosciences Bows Out Gracefully

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