Friday, Applera Corp-Applied Biosystems Group (ABI) said it agreed to repurchase $600 million worth of Applied Biosystems common stock from Morgan Stanley (MS). Repurchases would be funded using the Group's cash and existing available credit.
Applied Biosystems' first quarter earnings per share by about $0.01 due to the timing of the cash disbursement and the repurchase of shares.
However, the buyback is expected to be accretive to Applied Biosystems earnings per share for fiscal 2008, with the accretion dependent on the actual price paid under this transaction.
On August 8, Applera retained Morgan Stanley to explore alternatives to its current tracking stock structure, including the possibility of creating two independent publicly traded companies in place of the two tracking stocks. Currently, Applera's Applied Biosystems Group and Celera Group (CRA) trade under their own tracking stocks.
According to the current agreement, the minimum number of shares would be delivered to Applera within a period of about six weeks, with any additional shares to be delivered to the company within the following six months.
The actual number of shares to be repurchased would be based upon the volume-weighted average daily price of the Applied Biosystems stock during this period.
The company expects this repurchase to be dilutive to Following the completion of repurchase, Applera expects to buy back shares of Applied Biosystems Group in the open market during the next four to six quarters to complete its previously announced $1.2 billion share repurchase program.
Applera consists of two operating groups, namely The Applied Biosystems Group and Celera Group. Applied Biosystems Group serves the life science industry and research community by developing and marketing instrument-based systems, consumables, software, and services. Applied Biosystems is headquartered in Foster City, CA, and reported income from continuing operations of $170.9 million on revenues of $2.1 billion for fiscal 2007.
The Celera Group is primarily a molecular diagnostics business that is using proprietary genomics and proteomics discovery platforms to identify and validate novel diagnostic markers, and is developing diagnostic products based on these markers as well as other known markers.
ABI closed Thursday's regular trading session at $31.07. For the past 52-weeks, the stock has been trading in the range of $27.79 - $39.49.
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