A Medical Device Daily

Applera (Norwalk, Connecticut) reported that, pursuant to an authorization from its board of directors disclosed in early August, it has entered into an agreement with Morgan Stanley for the accelerated repurchase of $600 million worth of its Applied Biosystems (Foster City, California) group common stock (Medical Device Daily, Aug. 10, 2007).

Based on this agreement, Applera will pay Morgan Stanley $600 million in exchange for a variable number of shares, subject to a minimum and a maximum. The minimum number of shares will be delivered to the company within 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 will be based upon the volume-weighted average daily price of the Applied Biosystems common stock during this period. Repurchases will be funded using the group’s cash and existing available credit. Because of the timing of the cash disbursement and the repurchase of shares, Applera said it anticipates that this repurchase will be dilutive to Applied Biosystems earnings per share in the first quarter of fiscal 2008 by about 1 cent.

The transaction 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. In addition, during the next four to six quarters and following the conclusion of this program, the company said it intends to repurchase shares of Applied Biosystems common stock in the open market to complete its $1.2 billion share repurchase authorization.

Applera’s Applied Biosystems group serves the life science industry and research community by developing instrument-based systems, consumables, software, and services. It reported sales of about $2.1 billion during fiscal 2007.

The Celera (Rockville, Maryland) group is primarily a molecular diagnostics business that is using 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.

In early August, the company reported hiring Morgan Stanley to explore “alternatives” to its current tracking stock structure, including splitting into two independent publicly traded companies.

Currently, Applied Biosystems and Celera units trade under their own tracking stocks.