Genetic sequencing giant Illumina Inc. agreed to acquire Grail Inc. in a deal valuing the cancer-detection startup at $8 billion.
Grail shareholders will receive $3.5 billion in cash and $4.5 billion in Illumina common stock, the companies said. Illumina already holds 14.5% of Grail’s outstanding shares, and approximately 12% on a fully diluted basis.
Illumina, a giant in the DNA sequencing space, serves as the backbone for consumer genetics tests and is becoming an integral part of pharmaceutical research efforts. Grail, originally founded by Illumina and later spun out as a standalone company, is developing a blood test that aims to detect cancers early.
Illumina is also its sole supplier of the sequencers that Grail uses for performing its genomic tests. Joining the two companies back together would bring the testing and sequencing under one roof.
Grail has a list of high-profile tech and healthcare backers, including Bill Gates, Jeff Bezos, Merck & Co. and Johnson & Johnson, according to its website. The company had filed for an initial public offering this month. As a private company Grail has raised more than $1.9 billion, regulatory filings show.