West Coast Editor

Tools company Caliper Life Sciences Inc. entered a deal to buy the imaging systems firm Xenogen Corp. for about $80 million in stock and warrants. Subject to shareholders’ approval and regulatory clearance, the takeover is expected to finalize in the second quarter.

Caliper’s stock (NASDAQ:CALP) ended Monday at $6.04, up 59 cents.

Under the terms, Caliper would issue about 13.2 million shares of common stock and about 5.1 million warrants totaling about $80 million in exchange for all of Xenogen’s outstanding equity securities. The warrants will have a term of five years from the closing and an exercise price of $6.79 per share.

Based on Xenogen’s current capitalization and "certain assumptions" regarding the exercise of Xenogen stock options in the period prior to the closing, each holder of a Xenogen common share would get about 0.575 of a share of Caliper common stock and 0.223 of a warrant to acquire one Caliper common share, the companies said.

Upon the timely exercise of their warrants, Xenogen warrant holders will be entitled to the same number of Caliper common shares and warrants as Xenogen’s stockholders.

Caliper made news last fall when it disclosed the plan to buy Hanover, Md.-based NovaScreen Biosciences Corp. for $22 million up front with another $8 million tied to milestones, thus beefing up Caliper’s service offerings. (See BioWorld Today, Sept. 9, 2005.)

NovaScreen, a provider of in-vitro screening assays and in silico predictive screening tools, with expertise in G protein-coupled receptors and other molecular targets, had $8.6 million in revenue in 2004.

Xenogen brings microfluidics and optical imaging. Recording a revenue jump to $30.8 million in 2004 from $20.1 million in 2003, the firm offers more than $10 million in potential annual cost savings through consolidating its infrastructure with Caliper, the companies said, and the deal is expected to make Caliper cash flow positive starting next year.

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