Abcam CEO ‘feels great’ as shareholder meeting date is fixed for Danaher deal
Abcam has published a scheme circular on the proposed $5.7billion acquisition by Danaher Corp which includes the announcement of a shareholder vote on November 6 – and CEO Alan Hirzel has told the Cambridge Independent he “feels great” about the progress of the deal.
“It’s important for shareholders to exercise their views on the transaction,” said Mr Hirzel ahead of the crucial vote.
Next month’s general meeting provides the first opportunity for shareholders to have their say about the acquisition, which was agreed on August 28 and values Abcam shares at $24 apiece.
The Cambridge-based life sciences tools company initially invited offers in June, with the Danaher proposition selected following a process involving 30 counterparties.
The scheme circular states: “Danaher’s $24.00 per share in cash offer was the highest and best price received at any point in the process. In fact, the next highest bidder submitted a final offer of $22.50 per share. Danaher submitted three offers to the company, starting at $20.50.”
The statement adds: “The $24.00 per share price represents a 39 per cent premium to Abcam’s undisturbed closing share price on May 16, 2023.”
The situation had been ‘disturbed’ on May 17 when Abcam founder and former CEO Jonathan Milner made a bid to wrest back control of the life sciences tools company which he founded in 1998. That strategy remains extant and last week, as reported in the Cambridge Independent, Dr Milner published an open letter inviting Abcam’s shareholders to reject the Danaher deal.
With the November 6 date now set, CEO Alan Hirzel said on Friday (October 6) that the procedure followed was positive, fair – and had yielded the best bid.
“I feel great about the process we ran,” he said. “The banks did a terrific job of reaching out to everyone, and they had a lot of conversations. The management team spent a lot of time providing documents to everyone.
“I was excited that we were doing what we had to do to make sure Abcam and Abcam’s shareholders were being properly looked after.”
Abcam has been further reassured by a Deutsche Bank report which notes that “Danaher’s final offer price is above the high-end of the implied equity value of Abcam’s equity in nine of 10 different valuation scenarios analysed by Abcam’s financial advisers”.
Meanwhile, the scheme circular refers to Dr Milner’s bid as “an activism campaign”. Inspired by a conviction Abcam is underachieving, Dr Milner’s preferred strategy is to refocus on Abcam’s original core market – sale of antibodies – which the founder and former CEO until 2014 feels has been underperforming.
However Mr Hirzel, who took on the CEO mantle in 2014, said that the business has evolved and Abcam is now in a better place.
“Overall, this is a positive story for Cambridge and the UK, that we’ve been able to build up a company valued at $5.7bn when it was valued at one sixth of that when I took over. It’s a good outcome and a good outcome for Abcam.”
He added: “Diversification and innovation have been important drivers for Abcam.
“When I took over, annual revenue was £120m and 90 per cent of that was sales of products made by other companies, now nearly 70 per cent of sales are from our own products – and they’re better products – and we’ve also had the confidence to build out beyond antibodies.
“Antibodies are now 65 per cent of our business, and not to focus on that would be very unusual, but the market has expanded.”
Abcam has consistently demonstrated an ability to deliver high-quality tools and services at the very cutting edge of research into new disease models and treatments - and there’s lots more to come, says Mr Hirzel.
“The proteomic tools industry is experiencing high rates of innovation and capital investment in support of myriad new solutions to discover and evaluate protein biomarkers. Many of these technologies rely on high quality antibodies or affinity binders as part of the workflow.
“We’re the leading company in our field and there’s 800,000 researchers worldwide looking for our tools and we’re the go-to company for that, and we’re going to keep innovating and introducing 5-6 thousand new tools a year.
“Our financial plans continue to find very attractive double-digit growth in life sciences and areas we’re already operating in.”
The life sciences sector in its entirety is also, of course, growing at an unprecedented pace.
“What people don’t always understand is just how many tools haven’t been developed,” says Alan. “Since we’ve been working with the Michael J Fox Foundation for Parkinson’s Research (MJFF) the tools now exist - alpha-synuclein for instance - and we’d like to do that for every disease and there are literally thousands of diseases that need to be looked at - everything, including rare diseases.”
Alan is speaking from Waltham, Massachusetts, which is where he and his family have lived since August. The region is home to around 1,000 life sciences companies - and Alan says it makes sense for him to be there.
“Jonathan did something similar in Boston,” he remarks, adding: “The decision predated anything going on this year.
“There were three things drawing me to the US more and more: firstly 40 per cent of our business is in the US - and a lot of diagnostic companies are in the US. Secondly, as an independent company leading up to quarterly reporting I thought I’d be spending the majority of time here, and thirdly a tremendous amount of investment comes from here in Waltham in manufacturing logistics, and marketing and sales.
“So I had a chat with the board and my family a year ago and we decided that it would happen within a couple of years, to get set up here, to spend two years in Waltham. It’s everything I’d hoped for. I’m able to see more customers faster which is deeply satisfying, and help grow Abcam’s investments which is really exciting and is a good use of my time.”
But he’ll be back in the UK for the vote?
“I’ll be in the UK on November 6 for the shareholder event in London, but I’ll be back before that in any case - I’m back and forth all the time.
“From a regulatory point of view the situation is - assuming the vote carries in November - we still need to hear back from the competition review, which would be expected no later than mid-2024, but anything that can be done to bring that forward is going to be good for us.”