Illumina, Inc. · NASDAQ:ILMN
Illumina — Merger or Acquisition (January 2012)
16 slides from Illumina's merger presentation, Jan 25, 2012
Slide 1: Discussion Materials January 24, 2012
CONFIDENTIAL DISCUSSION MATERIALS January 24, 2012 [GRAPHIC OMITTED]
Slide 2: Disclaimer
Disclaimer These Discussion Materials are strictly confidential and have been prepared by Greenhill and Co., LLC ("Greenhill") and Citigroup Global Markets Limited ("Citi" and, together with Greenhill, the "Advisors") for the use of F. Hoffmann -La Roche Ltd. (the "Company") and are subject to the A
Slide 3: Table of Contents
TABLE OF CONTENTS 1. EXECUTIVE SUMMARY 2. Valuation Supporting Materials [GRAPHIC OMITTED] 3
Slide 4: Roche intends to commence a cash tender offer for Illumina at $44.50 per share
Greenhill and Citi understand that Roche intends to commence a cash tender offer to acquire Illumina, Inc. ("Illumina" or the "Company") at $44.50 per share Price Performance 12/12/11 --1/9/12 [GRAPHIC OMITTED] EXECUTIVE SUMMARY EXECUTIVE SUMMARY * During the past six weeks, Roche has repeatedly tri
Slide 5: Over the past year, Illumina has underperformed its peers and the broader market
[GRAPHIC OMITTED] OVER THE PAST YEAR, ILLUMINA HAS UNDERPERFORMED ITS PEERS AND THE BROADER MARKET EXECUTIVE SUMMARY ILLUMINA STOCK PERFORMANCE * Illumina's stock dropped as much as 60% from its 52-week high because of several factors, including: [] Twice-lowered revenue guidance after a drop in ord
Slide 6: Offer of $44.50 per share implies equity value of $5.7 billion
An offer of $44.50 per share gives an implied equity value for Illumina of $5.7 billion and an implied enterprise value of $5.6 billion [GRAPHIC OMITTED] EXECUTIVE SUMMARY PRICING Summary Evaluation of Offer Price * Higher cash value relative to Illumina's share price, particularly in a period of ma
Slide 7: Table of Contents: Valuation Supporting Materials
Table of Contents 1. Executive Summary 2. VALUATION SUPPORTING MATERIALS [GRAPHIC OMITTED] 7
Slide 8: Media Observations: Significant Recent Commentary on Illumina as a Takeover Target
MEDIA SOURCES [GRAPHIC OMITTED] [GRAPHIC OMITTED] Valuation Supporting Materials Media Observations Significant Recent Commentary on Illumina as a Takeover Target SELECTED COMMENTARY "Illumina Rises the Most Since January 2010 on Takeover Talk" "Illumina, a maker of tools for genetic analysis, gaine
Slide 9: Recent Trading Performance Since Takeover Rumors First Published
From when takeover rumors were first reported on December 22 to when Illumina publicly spoke at an investor conference, Illumina's stock surged 17% in a relatively flat market, along with substantial increases in trading volume for the stock and call options [GRAPHIC OMITTED] Valuation Supporting Ma
Slide 10: Illumina's public market valuation is at a premium to peers on forward earnings
Illumina's public market valuation is at a premium to peers based on forward earnings and in line on a growth -adjusted basis Additionally, the implied multiples of Roche's offer exceed the highest forward P/E multiples of its peers Source: Company filings, Capital IQ, I/B/E/S consensus as of 1/23/1
Slide 11: Rolling PEG Analysis
Roche's offer implies a priceto-earnings-growth ratio which is approximately equal to Illumina's three-year high and above its three-year average [GRAPHIC OMITTED] VALUATION SUPPORTING MATERIALS ROLLING PEG ANALYSIS [GRAPHIC OMITTED] Source: FactSet as of 1/23/12 11
Slide 12: Roche's offer is at the high end of multiples in precedent transactions
Roche's offer is at the high end of valuation multiples paid in recent precedent life science tools transactions Source: Company filings, Bloomberg Note: Includes selected announced, closed and effective transactions since 2006 in the biotechnology research equipment manufacturing and biological pro
Slide 13: Precedent Transactions Premiums to Unaffected Stock Price
Roche's offer gives Illumina shareholders a premium based on Illumina's trading price before the commencement of takeover rumors [GRAPHIC OMITTED] VALUATION SUPPORTING MATERIALS PRECEDENT TRANSACTIONS PREMIUMS TO UNAFFECTED STOCK PRICE Source: Company filings, Bloomberg, FactSet Note: Includes selec
Slide 14: Analyst Price Targets
Roche's offer is above the median analyst price target for Illumina's stock [GRAPHIC OMITTED] VALUATION SUPPORTING MATERIALS ANALYST PRICE TARGETS [GRAPHIC OMITTED] Source: Wall Street research, Bloomberg Note: Excludes price targets issued prior to 12/1/11 14
Slide 15: Precedent Unsolicited Transactions
Roche's offer is above the median premiums offered in precedent unsolicited transactions [GRAPHIC OMITTED] VALUATION SUPPORTING MATERIALS PRECEDENT UNSOLICITED TRANSACTIONS Date Enterprise Offer Premium to Unaffected Announced Target Name Acquiror Name Value Price 1 Day 1 Week 1 Month 52 Week All Ti
Slide 16: Cautionary Statement Regarding Forward-Looking Statements
CAUTIONARY STATEMENT REGARDING FORWARD -LOOKING STATEMENTS THESE MATERIALS CONTAIN CERTAIN FORWARD -LOOKING STATEMENTS. THESE FORWARD -LOOKING STATEMENTS MAY BE IDENTIFIED BY WORDS SUCH AS "BELIEVES", "EXPECTS", "ANTICIPATES", "PROJECTS", "INTENDS", "SHOULD", "SEEKS", "ESTIMATES", "FUTURE" OR SIMILA