Digene to be acquired by Qiagen for $1.6b.

Venlo, The Netherlands-based Qiagen NV, a manufacturer of diagnostic tests, has agreed to pay $1.6 billion in cash and stocks to purchase Gaithersburg, MD-based Digene Corp.

The acquisition, announced in early June, is expected to help boost Digene's international sales effort and speed technology development. Digene and Qiagen had US sales of about $117 million and $150 million, respectively, in 2006. The combined companies would have more than $350 million in total revenue, they reported, and added that they expect the number to rise to $800 million by next year.

As part of the agreement, Qiagen, which has US headquarters in Germantown, MD, will pay up to $880 million in shares. The $61.25 purchase price for a share is a 37% premium over Digene's $44.77 dosing price on June 1.

The deal is expected to be completed by September, the companies said.

Qiagen manufactures more than 100 diagnostic tests, used to search for DNA and protein cues that can help diagnose disease. Digene is the manufacturer of a diagnostic test for human papillomavirus (HPV). The HPV Test is the only one of its kind approved by the FDA in the United States.

According to Digene Chief Executive Daryl J. Faulkner, the companies' relationship dates back more than a decade. Qiagen co-developed and manufactures Digene's Rapid Capture System, which offers laboratories the ability to run three Digene diagnostic tests--for HPV, chlamydia and gonorrhea--on one technology platform. Talks of a merger began in late winter, Faulkner told The Baltimore Sun.

Qiagen stands to benefit from Digene's investments in the HPV market. More than 100 strains of HPV have been identified, with 30 of them being sexually transmitted. In addition, the virus can cause cervical cancer and has been linked to some oral and rectal cancers. The Centers for Disease Control and Prevention estimate that 6.2 million Americans are infected with the genital HPV annually and that 80% of women in the United States will have had some form of HPV by the time they're 50 years old.