Illumina Inc., a leading maker of the machines that sequence genes, said Monday it will pay $7.1 billion in cash and stock for a developer of a long-sought blood test that promises to detect cancer early.
The deal for the part of Grail Inc. that Illumina doesn’t already own will move the company deeper into the application of its gene-sequencing technology to the diagnosis and treatment of patients, a potential multibillion-dollar market.
Illumina founded Grail four years ago and owns a large stake in the company. Under the terms of the agreement, Grail owners excluding Illumina will get $3.1 billion in cash and shares in the gene-sequencer maker valued at the remaining $4 billion, Illumina said.
The owners will also have the option to receive additional cash or stock, or get contingent value rights to a portion of Grail’s annual revenue for the next 12 years, Illumina said.
Owners who choose to get the rights will get about 2.2% of Grail’s first $1 billion in revenue each year and roughly 7.9% of any Grail-related revenue above $1 billion, Illumina said.
