At the proposed merger’s ratio of 1.11 Standard shares per SomaLogic share, SomaLogic was valued at $3.00 per share at the time of the announcement, and $2.40 per share as of December 11, 2023.
Given SomaLogic’s unaffected share price of $2.30 the day before the announcement, the current value of the proposed merger represents just around a 4.3% premium to SomaLogic’s unaffected share price and a major discount to the probable value of SomaLogic shares without the proposed merger.
The proposed merger consideration also implies a valuation of SomaLogic that is significantly lower than the value implied by a recent – and highly relevant – comparable transaction: the acquisition of Olink by Thermo Fisher for $3.1 billion.
The Company’s proxy statement discloses that Standard engaged with SomaLogic several times prior to the 2023 discussions but does not make clear what came of those discussions or why they were terminated.
We also question whether the interest from multiple parties with respect to a minority investment were fulsomely considered by the SomaLogic transaction committee.
Further, we are troubled that Eli Casdin and Casdin Capital are significant shareholders in both SomaLogic and Standard, and Mr. Casdin remains on the boards of both companies.
Even more troubling is Mr. Casdin's close ties to members of the SomaLogic transaction committee despite his supposed “recusal” from such committee once talks between SomaLogic and Standard progressed.
We question how the SomaLogic transaction committee gained comfort with subordinating holders of SomaLogic’s common stock to three additional layers of Standard securities.
In stark contrast to SomaLogic’s current cash-rich, debt-free balance sheet, Standard will burden the pro forma combined entity with approximately $9.6 million of term debt, $55.0 million of convertible debt and $250 million of Series B Preferred Equity (held by Casdin Capital and Viking Global Investors LP).
We also question how the SomaLogic transaction committee accepted the outsized voting and consent rights afforded to Series B Preferred Equity holders and gained comfort with the assumption of Standard’s more than $60 million in soon-to-mature debt.
SomaLogic has significant growth potential as a standalone entity and does not need to transact at this time.
The Company is uniquely positioned with its strong, cash-rich balance sheet that we believe provides several years of runway to weather the current cycle’s headwinds.
Among the alternative paths that we believe could deliver superior value relative to the proposed merger, we point to the following:
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A shareholder-driven refresh of the SomaLogic Board of Directors (which we are prepared to pursue) at or before the next Annual Meeting of Stockholders and the subsequent appointment of a qualified permanent management team;
A credible and independently run strategic alternatives process that results in an acquisition or merger by a strategic market participant at a price greater than the one implied by the proposed merger and in line with SomaLogic’s historical valuation;
The continued standalone development of SomaLogic’s key proteomic assets as use cases for proteomics continue to increase; and
The standalone establishment of additional strategic commercial partnerships to capitalize on SomaLogic’s rich intellectual property estate and scientific know-how in the field of proteomics.
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Effective Date: 12/18/2023
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