Sunnyvale, Calif., March 21, 2004 - Molecular Devices Corporation (Nasdaq: MDCC), today announced that it has entered into a definitive agreement to acquire Axon Instruments, Inc., (ASX:AXN.AX) for approximately U.S. $70 million in cash and approximately U.S. $70 million in Molecular Devices common stock (based on a current average stock price). In addition, Molecular Devices will assume Axon's approximately U.S. $29 million in cash and marketable securities. This strategic transaction would expand Molecular Devices' product portfolio with systems for cellular neurosciences and genomics and combine complementary product lines in the fast-growing areas of high throughput imaging and electrophysiology. Among the expected benefits of the acquisition are product development synergies and improved distribution of Axon's products through Molecular Devices' worldwide sales and marketing organization.
Established in 1983, Axon is a pioneer in the field of electrophysiology, the preferred method for studying ion channels, an area of significant interest to pharmaceutical companies and life sciences researchers. Axon's products for electrophysiology address a wide range of customer needs, from lower-throughput research tools to the PatchXpress system for automated ion channel analysis. Axon also offers a popular line of instruments for scanning DNA and protein arrays and the ImageXpress system for high throughput biology applications. Axon achieved revenues of U.S. $33.5 million in 2003 and was profitable on both an operating and a net income basis. Axon employs 128 people, primarily in its Union City, California headquarters.
Commenting on the transaction, Dr. Joseph Keegan, President and Chief Executive Officer of Molecular Devices, said, "This acquisition is an exciting opportunity for Molecular Devices to broaden our footprint in our core drug discovery and life sciences markets and further strengthen our technology base. Both Molecular Devices and Axon possess world-class engineering and longstanding track records for delivering innovative products. Together, we would have an exceptional capability to provide enabling technology in areas of great importance to pharmaceutical and life sciences customers, including genomics, imaging, and the screening of GPCRs, kinases and ion channels."
Dr. Alan Finkel, Chief Executive Officer of Axon, added, "Molecular Devices' technological expertise, market presence, and excellent reputation make it an ideal partner for Axon. This combination would enhance the visibility of Axon's products and accelerate the development of innovative new products, particularly in the areas of imaging and ion channel screening." After the closing of the transaction, it is anticipated that Dr. Finkel will become Vice President and Chief Technology Officer of Molecular Devices, reporting to Dr. Keegan, who will remain President and Chief Executive Officer. As previously announced, Geoffrey Powell will retire from the position of President of Axon after the closing of the transaction.
Under the terms of the transaction, each share of Axon common stock would be converted into the right to receive U.S. $0.1359 in cash and 0.00734 of a share of Molecular Devices common stock. A substantial portion of the equity held in Axon is traded on the Australian Stock Exchange (ASX) in CUFS; each CUFS holder would also receive U.S. $0.1359 in cash and 0.00734 of a share of Molecular Devices common stock for each share of Axon common stock subject to a CUFS. Holders of options, other than those issued under Axon's employee option plans, would receive cash and shares of Molecular Devices common stock in the same amounts as they would have received had they exercised their options immediately prior to the effective date of the acquisition, net of the option exercise price. Molecular Devices would also assume outstanding options to purchase Axon common stock issued under Axon's employee option plans, which would convert into options to purchase common stock of Molecular Devices.
The transaction is subject to customary closing conditions, including approval of the transaction by the stockholders of Molecular Devices and the shareholders of Axon, Hart-Scott-Rodino clearance and the effectiveness of a registration statement with the Securities and Exchange Commission. If the transaction closes by the end of the second quarter of 2004, Molecular Devices would anticipate increasing its revenue guidance for the second half of 2004 by $20 million, bringing it to a range of $145 million to $155 million for the full year. Molecular Devices also expects that it would realize $4 million to $5 million in expense synergies on an annualized basis. The transaction is expected to be neutral to earnings per share guidance for 2004 and Molecular Devices anticipates maintaining its current EPS guidance of $0.65 to $0.75 for the year. While Molecular Devices has not established guidance for 2005, the transaction is expected to be accretive to the EPS generated by Molecular Devices on a stand-alone basis in 2005.
Conference Call Information
Molecular Devices will host a conference call on Monday, March 22 at 8:00 a.m. PST (11:00 a.m. EST). Interested parties can participate in the call by dialing 800-967-7141 (domestic) or 719-457-2630 (international). A taped replay of this call will be available through April 2, 2004. Replay dial-in numbers are 888-203-1112 (domestic) and 719-457-0820 (international) and the access code for the replay is 583884. Investors can also access a live web-cast of the call through a link posted on the investor page on Molecular Devices' website (www.moleculardevices.com). A replay of the web-cast will remain at this location through April 2, 2004.