Takara Bio USA Holdings, Inc. (TBUSH), a subsidiary of Japanese global biotech and life science company Takara Bio Inc. (TYO: 4974), agreed to acquire California-based genomics technology company WaferGen Bio-systems, Inc. (NASDAQ: WGBS) for up to $50 million in cash, subject to certain 2016 revenue milestones.

The final purchase price will be based on a multiple of WaferGen’s 2016 calendar revenue and capped at $50 million. The multiple will range between 1.0 times up to 3.5 times WaferGen’s revenue in 2016. If revenues exceed $9 million the multiple will be 3.5.

Takara Bio USA, Inc. (TBUSA), a wholly owned subsidiary of TBUSH, is a guarantor under the merger agreement. The merger is expected to close after completion of WaferGen’s audited financial statements in February or March of 2017.

WaferGen Bio’s total revenue for the three months ended March 31, 2016 was approximately $1.9 million, compared to approximately $1.1 million for the prior year period. Total revenue for the 12-months ended December 31, 2015, was approximately $7.2 million, compared to approximately $6.0 million for full-year 2014.

WaferGen Bio’s shares jumped nearly 64% on Friday, closing at $0.90 per share, bringing the company’s market value to $16.88 million.

On October 21, 2015, WaferGen Bio raised $17.25 million in an underwritten public offering of common stock priced at $1 a share, coupled with warrants. WaferGen Bio first went public on the OTC market by way of a reverse merger in June 2007. On August 27, 2014, WaferGen raised $20 million in an underwritten public offering and uplisting to NASDAQ.

“WaferGen’s technologies and broad array of rapidly growing product offerings are providing a powerful set of tools for biological analysis at the molecular and single-cell level in the life sciences, pharmaceutical, and clinical laboratory industries,” said Rollie Carlson, president and CEO of WaferGen. “I’m confident that through this merger we will cement a leadership position in the genomics research market and our combined solutions will accelerate breakthrough scientific and medical discoveries worldwide.”

“The combination of TBUSA’s RNA-seq and T Cell Receptor (TCR) profiling technologies with WaferGen’s ICELL8 platform for isolation and processing of single cells will significantly expand our offering in the fast-growing single-cell and immuno-sequencing markets, and give customers greater access to these products through our global and commercial reach,” said Carol Lou, president of TBUSA. “WaferGen’s technologies are highly complementary to our reagent portfolio and the combination presents new opportunities for us in genetic analysis including clinical and applied markets.”

The WaferGen acquisition will allow Takara Bio to augment and expand its worldwide commercial offerings in transcriptomics and create new market opportunities in other areas of genomics. Takara Bio provides a wide range of life science products and services under the Takara, Clontech, and Cellartis brands that assist discovery, translational and clinical scientists in the advancement of their work.

Following WaferGen stockholders’ approval of the merger, TBUSH will pay to WaferGen a $2.5 million deposit. Between January 1 and January 17, 2017, TBUSH will be an additional $2.5 million deposit, subject to WaferGen’s remaining in compliance with the merger agreement. In the event that the agreement is terminated, unless such termination is due to TBUSH’s breach, WaferGen must return to TBUSH any deposit amount received. WaferGen also has the right to return all or any portion of the deposit up to ten business days prior to the closing of the merger.

The deal is subject to customary closing conditions including approval by WaferGen’s stockholders, continuous maintenance by WaferGen of its Nasdaq listing and completion of WaferGen’s 2016 audit.

Torreya Partners acted as financial advisor to WaferGen. GCA Savvian acted as financial advisor to Takara Bio. Morrison & Foerster LLP acted as legal counsel to Takara Bio while K&L Gates LLP acted as legal counsel for WaferGen.

WaferGen Bio-systems, Inc. is a biotechnology company that offers innovative genomic technology solutions for single-cell analysis and clinical research. The ICELL8 Single-Cell System is a first of its kind system that can isolate thousands of single cells and processes specific cells for analysis, including Next Generation Sequencing. The system has demonstrated unbiased isolation of single cells from solid tumors, brain cells, pulmonary airway cells, and multiple cell lines. The SmartChip platform can be used for profiling and validating molecular biomarkers, and can perform massively-parallel singleplex PCR for one-step target enrichment and library preparation for clinical NGS. The Apollo 324 system can be used to process DNA and RNA from clinical samples to next generation sequencing ready libraries. These technologies offer a powerful set of tools for biological analysis at the molecular and single-cell level in the life sciences, pharmaceutical, and clinical laboratory industries. The company was founded in 2002 and is headquartered in Fremont, California.

Takara Bio USA, Inc. (formerly Clontech Laboratories, Inc.), a subsidiary of Takara Bio Inc., develops, manufactures, and distributes a wide range of life science reagents and kits under the Takara, Clontech, and Cellartis brands. Key products include SMART cDNA synthesis kits for a variety of samples and applications, including NGS; high-performance qPCR and PCR reagents (including the Takara Ex Taq, Takara LA Taq, Titanium, and Advantage enzymes); Cellartis stem cells and stem cell reagents; RT enzymes and SMART library construction kits; the innovative In-Fusion® cloning system; Guide-it gene editing tools; Tet-based inducible gene expression systems; and Living Colors fluorescent proteins. These and other products support applications including NGS; gene discovery, regulation, and function studies; protein expression and purification; RNAi, gene editing, and stem cell studies; and plant and food research.

Takara Bio Inc. is an innovative biotechnology company based in Shiga, Japan. As a world leader in biotechnology research and development, Takara Bio was the first company to market PCR technology in Japan and is also the developer of the RetroNectin reagent, which is used as a world standard in gene therapy protocols. In addition to providing research reagents and equipment to the life science research market, Takara Bio has active research and product development activities in the fields of gene and cell-based therapy and agricultural biotechnology; and is committed to preventing disease and improving the quality of life for all people through the use of biotechnology. Through strategic alliances with other industry leaders, Takara Bio aims to extend its reach around the world.

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