SomaLogic to merge with Standard BioTools in all-stock deal
BOULDER — SomaLogic Inc. (Nasdaq: SLGC) and California-based Standard BioTools Inc. (Nasdaq: LAB) have agreed to an all-stock merger deal that is expected to result in a combined company valued at more than $1 billion.
Existing executives with both companies will lead the combined organization, which will carry the Standard BioTools name. SomaLogic CEO Adam Taich will serve as chief strategy officer, and SomaLogic chief research and development officer Shane Bowen will be chief technology officer. Standard BioTool’s current CEO, Michael Egholm, will remain in that role when the merger closes, which is expected to occur in the first quarter of 2024.
“This is truly a one-plus-one-equals-three scenario,” Egholm said Wednesday on a conference call with investors.
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SomaLogic develops platforms to read thousands of proteins in a patient’s blood or urine sample that may signal illnesses or future health conditions and suggest potential treatments via machine learning.
“SomaLogic’s world-class proteomic tools fuel research discoveries with unmatched reliability, and fit well with our life science tools platform. The value of SomaLogic’s technology and expertise is substantiated by elite relationships in the pharmaceutical research space, as well as a developing genomics-proteomics commercial partnership with Illumina,” Egholm said in the joint release. “This transaction activates our strategy to unlock value in the highly fragmented life science tools space. It positions Standard BioTools with an increasingly scalable platform and powerful balance sheet, which will be underpinned by unparalleled operating discipline and a shared mission to accelerate breakthroughs in human health. This is an exciting step forward for both of our companies and we look forward to the significant value creation opportunities ahead.”
Standard BioTools, according to the release, “has an established portfolio of essential, standardized next-generation technologies that help biomedical researchers develop medicines faster and better. As a leading solutions provider, the company provides reliable and repeatable insights in health and disease using its proprietary mass cytometry and microfluidics technologies, which help transform scientific discoveries into better patient outcomes.”
The combined companies will have operations in California, Colorado, Massachusetts, Canada and Singapore.
It was not immediately clear Wednesday what, if any, impact the merger will have on SomaLogic employees and facilities in Boulder. However, there could be some redundancies created — and likely eliminated in the future — by the deal. “The transaction is expected to generate $80 million in annual cost synergies by 2026,” SomaLogic and Standard BioTools said.
The deal, which was unanimously approved by the boards of directors of both companies, establishes a deal that will see SomaLogic shareholders receive 1.11 shares of Standard BioTools common stock for each share of SomaLogic common stock owned. When the merger is complete, SomaLogic shareholders will own approximately 57% of the combined company, and Standard BioTools shareholders will own the remainder.
“This transaction brings together two organizations with mutual visions and values to create a multi-omics leader with the financial strength to self-fund growth investments and accelerate research insights,” Taich said in the release. “We look forward to partnering with the team at Standard BioTools to better serve the needs of translational and clinical pharmaceutical research, while delivering significant value for our shareholders.”
SomaLogic went public in early 2021 with a merger with a special purpose acquisition company that added about $651 million in new funding to the company’s books and valued it at $1.23 billion.
The road toward the merger with Standard BioTools has been a rocky one, as SomaLogic has struggled to attain profitability. The company’s stock price has shaved off more than 80% of value since the SPAC deal.
In late 2022, SomaLogic laid off some of its employees.
“In December we had a small reduction in personnel, distributed across our remote and onsite workforce,” a company spokeswoman told BizWest at the time. “This difficult choice was driven by a reaction to a tough economic climate predicted in 2023. To align with our current growth expectations in a challenging economy, we needed to revise our plans and refocus our resources on our life-sciences business.”
In August, the company posted higher year-over-year sales for the second quarter of 2023, but SomaLogic’s losses also grew in the period.
“Our second quarter results are in line with our expectations despite navigating operational changes and a dynamic macroeconomic backdrop. While our progress this quarter in both core assay services and distributed kits is encouraging, there is still more work to be done,” Taich said in a prepared statement when the second quarter earnings report was released. “We have the benefit of a strong cash position, yet remain fully committed to spending discipline and continued operational rationalization to maximize SomaLogic’s long-term position in a growing proteomics market.”
SomaLogics projected on Wednesday that it expects revenues for the full 2024 fiscal year to range from $80 million to $84 million.
The merger “sets both companies up on the accelerated path to scale, to profitability,” Jeff Black, who is Standard BioTools’ chief financial officer and will hold the same role with the combined company, said during the conference call.
Company leaders expect the combined company to post sales of $300 million by 2026.
