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Business Observer Friday, Jan. 8, 2016 6 years ago

Hammering the deal

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When Fort Myers-based cancer-testing firm NeoGenomics announced the deal to acquire rival Clarient from General Electric's health care division in October, it was the culmination of negotiations that dated back to November 2014.

When Fort Myers-based cancer-testing firm NeoGenomics announced the deal to acquire rival Clarient from General Electric's health care division in October, it was the culmination of negotiations that dated back to November 2014.

NeoGenomics documents recently filed with the Securities and Exchange Commission reveal the blow-by-blow description of how the final deal came together.

Negotiations began Nov. 6, 2014, when NeoGenomics Chairman and CEO Douglas VanOort called General Electric Chairman Jeffrey Immelt to discuss the possible acquisition of Clarient. Within a few weeks VanOort began negotiations with executives from GE Healthcare.

NeoGenomics' first offer for Clarient came Jan. 20. It totaled $251.6 million, consisting of $125.8 million in cash and $125.8 million worth of common stock. GE rejected the offer and countered with $349 million, consisting of $157 million in cash and $192 million of convertible preferred stock.

That was the opening salvo for what would be a tortuous back-and-forth between the two companies over the next nine months. Securities filings show NeoGenomics and GE made 11 more offers and counteroffers before the sides finally reached a deal Oct. 20.

Because of the complexity of the terms, both companies wrestled with each component of the cash-and-stock deal. For example, the cash component fluctuated from $126 million to $157 million, then $100 million and finally on $80 million as the stock consideration changed.

Under the final terms of the deal, NeoGenomics agreed to pay $80 million in cash, $110 million in preferred stock and 15 million shares of common stock. At closing Dec. 30, the deal was valued at $310 million.

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