Fujifilm Holdings to Acquire Cellular Dynamics International

FUJIFILM Holdings Corporation and Cellular Dynamics International, Inc., a leading developer and manufacturer of fully functioning human cells in industrial quantities to precise specifications, announced that the two companies have entered into a definitive agreement whereby Fujifilm will acquire CDI via an all-cash tender offer to be followed by a second step merger.

Fujifilm aims to acquire all issued and outstanding shares of CDI’s common stock for $16.5 per share or approximately $307 million (on a fully diluted basis). The offer represents a premium of 108% to CDI’s closing price on March 27. 2015. Upon completion of the transaction, CDI will continue to run its operations in Madison, WI and Novato, CA as a consolidated subsidiary of Fujifilm. The announced transaction was unanimously approved by the Boards of Directors of both companies.

Under the terms of the agreement, Fujifilm will commence an all-cash tender offer no later than April 6, 2015. The transaction is conditioned on the tender achieving the minimum acceptance threshold, regulatory approvals and other customary conditions. Fujifilm will finance the transaction from the cash on its balance sheet and the completion of the acquisition is not subject to any financing conditions. It is anticipated that the tender offer will close during the second calendar quarter of 2015.

CDI was founded in 2004 and listed on NASDAQ in July 2013. The company had global revenues of $16.7 million in the year ended, Dec. 31, 2014 and had 155 employees as of Dec. 31, 2014.

CDI’s technology platform enables the production of high-quality fully functioning human cells, including induced pluripotent stem cells (iPSCs), on an industrial scale. Customers use CDI’s products, among other purposes, for drug discovery and screening, to test the safety and efficacy of their small molecule and biological drug candidates, for stem cell banking, and in the research and development of cellular therapeutics. CDI’s proprietary iCell product catalogue encompasses 12 different iPSC based cell types, including iCell Cardomyocytes, iCell Hepatocytes, and iCell Neurons. During 2014 CDI sold to 18 of 20 top biopharmaceutical companies.

Fujifilm has been strengthening its presence in the regenerative medicine field over several years, including by acquiring a majority of shares of Japan Tissue Engineering Co., Ltd. (J-TEC) in December 2014.

This acquisition of CDI will allow Fujifilm to gain entry into the area of iPS cell-based drug discovery support services. Fujifilm also plans to benefit from the combination of CDI’s iPS cell technology and experience and Fujifilm’s expertise in material science, engineering and J-TEC’s quality management systems. The combination of these will help accelerate product development in regenerative medicine while expanding the commercial opportunities.

“We are delighted to be able to pursue the business from drug discovery to regenerative medicine with CDI, which develops and manufactures iPS cells,” said Shigetaka Komori, chairman and CEO of Fujifilm. “We have optimal scaffolding material, ‘recombinant peptides,’ for cell generation and technologies useful for regenerative medicines such as material science and engineering. Our group company, Japan Tissue Engineering, markets regenerative medicine products in Japan. By welcoming CDI to the Fujifilm Group and by combining the technologies and knowhow of both companies, we will seek synergies and efficiencies to be more competitive in the field of drug discovery and regenerative medicine.”

“CDI has become a leader in the development and manufacture of fully functioning human cells in industrial quantities to precise specifications,” Robert J. Palay, chairman and CEO of CDI, added. “CDI and Fujifilm share a common strategic vision for achieving leadership in the field of regenerative medicine. The combination of CDI’s technology with Fujifilm’s technologies, know-how, and resources brings us ever closer to realizing the promise of discovering better, safer medicines and developing new cell therapies based on iPSCs.”

Fujifilm has successfully transformed its business structure for growth by expanding from traditional photographic film to other priority business fields. Positioning the healthcare business as one of its key growth areas, Fujifilm is seeking to cover “prevention, diagnosis, and treatment” comprehensively.