QIAGEN and Digene Announce Merger Creating Market and Technology Leader In Molecular Diagnostics

Transaction Valued at Approximately US$1.6 Billion

Expected to be Accretive in 2008 to QIAGEN's Earnings Per Share

Jun 03, 2007, 01:00 ET from QIAGEN from ,Digene

    VENLO, Netherlands and GAITHERSBURG, Md., June 3 /PRNewswire-FirstCall/
 -- QIAGEN N.V. (Nasdaq:   QGEN; Frankfurt, Prime Standard: QIA) and Digene
 Corp. (Nasdaq:   DIGE) announced today a definitive agreement to combine the
 two companies to create market- and technology-leadership in molecular
 diagnostics. The Boards of Directors of both companies unanimously approved
 the transaction in which QIAGEN is to acquire 100% of Digene's stock for a
 combination of cash and QIAGEN common stock. This strategic transaction
 combines QIAGEN's leading portfolio of sample and assay technologies,
 including a broad panel of molecular diagnostic tests, with Digene's
 leadership in HPV-targeted molecular diagnostic testing, creating a global
 leader in molecular diagnostics outside blood screening and viral load
 monitoring. It is anticipated that the combined company will have over
 US$350 million of molecular diagnostics revenues and more than US$800
 million in revenues overall in 2008.
     Under the terms of the agreement, the transaction will be effected as
 an exchange offer, followed by a merger of Digene into a subsidiary of
 QIAGEN. The acquisition consideration will consist of cash and QIAGEN
 stock, and Digene shareholders may elect to receive for each Digene share
 either US$61.25 in cash or 3.545 shares of QIAGEN stock, subject to
 pro-ration so that the total consideration issued for Digene stock consists
 of 55% cash and 45% QIAGEN stock. Based on the companies' closing stock
 prices on June 1, 2007, the US$61.25 per share of consideration to be
 received by Digene shareholders represents a premium of 37% and total
 equity consideration of approximately US$1.6 billion, which includes US$170
 million in cash. It is anticipated that the stock portion of the
 consideration will be tax-free to Digene shareholders and QIAGEN
 shareholders will own approximately 78% of the combined company on a fully
 diluted basis, and Digene shareholders will own approximately 22%.
     QIAGEN is the world's leading provider of sample and assay technologies
 for biological targets such as DNA, RNA and proteins. Through its
 technology- leading positions as well as through catalytic acquisitions,
 QIAGEN has created a molecular diagnostics franchise which, with
 approximately US$150 million in annual sales, is one of the largest in the
 industry. The company offers the world's broadest portfolio of molecular
 diagnostic tests, which are available subject to regulatory approval in
 many countries of the world.
     Digene holds a unique leadership position in molecular diagnostics.
 Digene's primary product, the Digene(R) HPV (human papillomavirus) Test,
 screens for the presence of high-risk types of the virus that have been
 shown to be the cause of cervical cancer. The Digene HPV Test is the only
 test for HPV that is both FDA-approved and CE-marked. This addresses one of
 the largest and most rapidly expanding market segments in women's health
 and molecular diagnostics.
     "The strategic rationale for this transaction is compelling as it
 combines QIAGEN's leading technology portfolio and our breadth of molecular
 diagnostic tests with Digene's leadership in what is seen as the
 fastest-growing segment of molecular diagnostics," said Peer M. Schatz,
 Chief Executive Officer of QIAGEN. "This transaction creates significant
 value for our shareholders and instantaneous market and technology
 leadership in what is one of the most exciting areas of life sciences and
 healthcare: molecular diagnostics. The joint franchises link virology with
 oncology, thereby creating an exceptional platform to add next-generation
 and high-value molecular diagnostic products and strategically position the
 company for future growth.
     "This transaction is an exciting and important next step for QIAGEN. It
 is consistent with our strategy to expand our leadership in sample and
 assay technologies. We are enthusiastic about the opportunity to combine
 our complementary strengths and collective resources as one company. This
 transaction provides us with many ways to drive top-line and bottom-line
 growth, such as access to new channels with existing and new products and
 combined technology, resources and infrastructure to provide greater
 operating strengths. This strategic transaction will be a catalyst for
 growth and, as such, we do not anticipate significant changes in the
 combined company's workforce. We look forward to delivering the significant
 benefits of the combination to all of our shareholders and to working
 alongside Digene's talented employees," Mr. Schatz continued.
     Daryl J. Faulkner, Chief Executive Officer and President of Digene,
 said, "This transaction provides our shareholders with immediate value as
 well as a unique opportunity to participate in the significant upside
 potential of a new entity that we believe will be a global leader in
 molecular diagnostics. We are extremely proud of the work we have done to
 develop and introduce the first HPV test to be both FDA-approved and
 CE-marked, and to build a business with an annual run rate of over US$200
 million in revenues. We look forward to the enhanced opportunities that
 will result from this merger, which will allow the combined company to
 expand its geographic reach and offer a larger portfolio of products and
 services to address a broad spectrum of needs.
     "We are pleased to be able to build on the successful partnership we
 have had with QIAGEN for more than a decade. We have collaborated on
 various projects, such as our current Rapid Capture(R) System, which QIAGEN
 co- developed and manufactures. By accelerating this existing and
 productive working relationship, we anticipate future growth opportunities
 and have already begun to develop new products," Mr. Faulkner continued.
     Value drivers for the combined entity include:
     - Creates a market and technology leading player in molecular diagnostics
       with over US$350 million of molecular diagnostics revenues;
     - Accretive to growth in revenues;
     - Industry-leading sales channel with over 300 employees in molecular
       diagnostics sales, over 1000 overall;
     - Platform for expansion of assay portfolio and other growth
     - Expands opportunities across diagnostics, applied testing, pharma and
       research customers;
     - Technology development and commercialization partners for more than a
     - Similar cultures of focus and excellence;
     - Rapid integration expected due to a long-standing relationship and
       geographic proximity.
     Value drivers for QIAGEN include:
     - Digene's highly focused strategy in molecular diagnostics (MDx) is a
       natural fit into QIAGEN's strategy;
     - Significant value creation to QIAGEN shareholders and contribution to
       QIAGEN's growth profile;
     - Leadership in what is considered one of the most important assays in
     - HPV testing is fastest growing, large segment in MDx with over US$1
       billion market potential;
     - Digene's leading IP positions in HPV - a virus with more than 100
       subtypes, of which approximately 13 are high-risk;
     - HPV bridges QIAGEN's virology leadership into the fast-growing oncology
     - The HPV assay creates unique value for QIAGEN's platforms and assay
     - Unique regulatory position - Digene has the only FDA-approved test for
     Value drivers for Digene include:
     - Highly attractive consideration for Digene shareholders, including
       option to benefit in upside potential;
     - QIAGEN's unparalleled sample and assay technology breadth creates
       opportunities for future;
     - Adds key assay technologies such as multiplex (QIAplex), PCR and
       isothermal technologies;
     - Adds key sample technologies such as DNA processing from cervical swabs;
     - QIAGEN's broad assay portfolio creates new value for Digene's customers;
     - QIAGEN's global sales strength accelerates rapid global rollout -
       including Asia;
     - Can utilize QIAGEN's operations and infrastructure for next phase of
     Both QIAGEN and Digene have strong leadership teams with proven
 expertise in both molecular diagnostics and life sciences. With the new
 platform of global infrastructure and scale, as well as extensive R&D
 capabilities, the combined company is poised for immediate growth as an
 industry leader. Both companies have talented and experienced employees who
 have achieved high standards in innovation and service to their customers
 and patients. The breadth and depth of both companies' management teams and
 employees will be instrumental in realizing the substantial upside
 potential of the combination.
     Based on preliminary analyses and assuming the transaction closes in
 the August/September time period, QIAGEN expects this transaction to
 contribute revenues of approximately US$58 to $60 million in the fourth
 quarter 2007 and approximately US$260 to $270 million for the full year of
 2008. On an adjusted basis excluding one-time charges, integration and
 restructuring costs and amortization of acquired IP as well as equity based
 compensation (SFAS 123R), the acquisition is expected to dilute QIAGEN's
 adjusted EPS by US$0.03 to $0.04 in the fourth quarter 2007. It is
 anticipated that the transaction will be accretive to QIAGEN's adjusted EPS
 in 2008 by US$0.02 to $0.04. QIAGEN expects the transaction to be
 significantly accretive to earnings thereafter.
     Transaction Summary
     - Merger agreement signed on June 3, 2007;
     - Transaction expected to close in the August/September time period;
     - Pre-tax cost savings of approximately US$35 to US$45 million per year;
     - Combination expected to add revenues of approximately US$58 to $60
       million in the fourth quarter 2007;
     - Combination expected to incur customary one-time charges at closing;
     - Combination expected to add revenues of approximately US$260 to $270
       million in 2008;
     - Combination expected to be accretive to QIAGEN's adjusted EPS by US$0.02
       to $0.04 in 2008 and significantly accretive thereafter;
     - Significant increase in QIAGEN's adjusted operating margin expected in
       2008 and thereafter;
     - Rapid integration expected due to a long-standing relationship and
       geographic proximity;
     - QIAGEN has received financing commitments required to complete the
     About Cervical Cancer and HPV
     HPV is a family of common viruses, of which more than 30 types are
 transmitted through intimate (genital) skin-to-skin contact. The U.S.
 Centers for Disease Control and Prevention estimates that 6.2 million
 Americans acquire a new genital HPV infection every year and that 80% of
 women will be infected by the age of 50. Digene markets the only test that
 is both FDA- approved and CE-marked for detection of 13 high-risk types of
 HPV. Studies involving more than 200,000 women and spanning four continents
 have shown that the sensitivity of the Digene HPV Test is significantly
 higher than Pap (cytology) testing alone. HPV testing is typically
 performed in the same laboratories in which QIAGEN's products are used. In
 addition, the new combined company will be uniquely positioned to
 facilitate HPV testing in under-served regions in both industrialized and
 developing countries.
     QIAGEN Management and Headquarters
     Following the close of the transaction, Peer M. Schatz will remain
 Chief Executive Officer of QIAGEN, Roland Sackers will remain Chief
 Financial Officer of QIAGEN and Daryl J. Faulkner will serve as co-head of
 the Integration Steering Committee. The combined company will be called
 "QIAGEN" with its U.S. headquarters in Maryland.
     Approvals and Time to Close
     The transaction is subject to the tender of a majority of Digene's
 common stock on a fully diluted basis, approval by QIAGEN's shareholders,
 as well as customary closing conditions including expiration of the
 applicable waiting period under the Hart-Scott-Rodino Antitrust
 Improvements Act of 1976. The transaction is expected to close in the
 August/September time period.
     Digene Analyst Day
     In light of today's announcement, the Digene Analyst Day, which was
 previously scheduled to be held on June 5, 2007, will be rescheduled for
 the combined company after the transaction is completed.
     In connection with the transaction, Goldman, Sachs & Co. is acting as
 exclusive financial adviser to QIAGEN, and Mintz, Levin, Cohn, Ferris,
 Glovsky and Popeo, P.C., De Brauw Blackstone Westbroek, and Freshfields
 Bruckhaus Deringer are legal counsel. JP Morgan is acting as exclusive
 financial adviser to Digene, and Ballard, Spahr, Andrews & Ingersoll, LLP
 are legal counsel.
     Conference Call / Webcast Information
     Please join us on Monday, June 4, 2007, when QIAGEN and Digene will host a
 conference call and webcast with investment analysts and shareholders at 8:30
 a.m. (Eastern Daylight Time) / 2:30 p.m. (Central European Summer Time) to
 provide more information on this announcement and respond to questions.  The
 webcast and accompanying slides can be accessed at www.qiagen.com and
 www.digene.com.  An audio archive of the call will be available on both
 companies' Web sites.
     Conference Call Dial-in:    +1-888-562-3356    Domestic
                                 +1-973-582-2700    International
                                 Passcode:          8863042
     Replay Dial-in:             +1-877-519-4471    Domestic
                                 +1-973-341-3080    International
                                 Passcode:          8863042
     Webcast Access:             www.qiagen.com  or  www.digene.com
     About QIAGEN
     QIAGEN N.V., a Netherlands holding company is the leading provider of
 innovative sample and assay technologies and products. QIAGEN's products
 are considered standards in areas such as pre-analytical sample preparation
 and assay solutions in research for life sciences, applied testing and
 molecular diagnostics. QIAGEN has developed a comprehensive portfolio of
 more than 500 proprietary, consumable products and automated solutions for
 sample collection, nucleic acid and protein handling, separation, and
 purification and open and target specific assays. The company's products
 are sold to academic research markets, to leading pharmaceutical and
 biotechnology companies, to applied testing customers (such as in
 forensics, veterinary, biodefense and industrial applications) as well as
 to molecular diagnostics laboratories. QIAGEN employs more than 1,900
 people worldwide. QIAGEN products are sold through a dedicated sales force
 and a global network of distributors in more than 40 countries. In this
 press release QIAGEN is using the term molecular diagnostics. The use of
 this term is in reference to certain countries, such as the United States,
 limited to products subject to regulatory requirements. Current QIAGEN
 molecular diagnostics products are 34 EU CE IVD assays, six EU CE IVD
 sample preparation products, one 510k PAX RNA product, nine China SFDA IVD
 assays and 98 general purpose reagents. Further information about QIAGEN
 can be found at www.qiagen.com.
     About Digene
     A leader in molecular diagnostics, Digene develops, manufactures and
 markets proprietary DNA and RNA tests, with a focus on women's health. The
 company's flagship product, the Digene(R) HPV Test, is the only
 FDA-approved and CE-marked test for the detection of human papillomavirus,
 the cause of essentially all cervical cancers. Digene's product portfolio
 also includes tests for the detection of other sexually transmitted
 infections, including chlamydia and gonorrhea. Digene tests are marketed in
 more than 40 countries worldwide. Headquartered in Gaithersburg, MD, Digene
 is traded on NASDAQ under the symbol DIGE. For more information, visit
 www.digene.com and www.theHPVtest.com.
     Forward-Looking Statements
     This communication contains certain forward-looking statements. These
 forward-looking statements, which may include, but are not limited to,
 statements concerning the financial condition, results of operations and
 businesses of QIAGEN and Digene and the benefits expected to result from
 the contemplated transaction, are based on management's current
 expectations and estimates and involve risks and uncertainties that could
 cause actual results or outcomes to differ materially from those
 contemplated by the forward- looking statements.
     Factors that could cause or contribute to such differences may include,
 but are not limited to, the risk that the conditions relating to the
 required minimum tender of Digene shares or regulatory clearance might not
 be satisfied in a timely manner or at all, risks relating to the
 integration of the technologies and businesses of QIAGEN and Digene,
 unanticipated expenditures, changing relationships with customers,
 suppliers and strategic partners, conditions of the economy and other
 factors described in the most recent reports on Form 20-F, Form 6-K and
 other periodic reports filed with or furnished to the Securities and
 Exchange Commission by QIAGEN and the most recent reports on Form 10-K,
 Form 10-Q, Form 8-K and other periodic reports filed by Digene with the
 Securities and Exchange Commission.
     Additional Information
     QIAGEN is filing today a Current Report on Form 6-K that will include
 as exhibits the Agreement and Plan of Merger among QIAGEN, QIAGEN North
 American Holdings, Inc., QIAGEN's merger subsidiary and Digene Corporation.
 QIAGEN intends to file a Registration Statement on Form F-4 and a Schedule
 TO, and Digene plans to file a Solicitation/Recommendation Statement on
 Schedule 14D- 9, with the Securities and Exchange Commission in connection
 with the transaction. QIAGEN and Digene expect to mail a Prospectus, which
 is part of the Registration Statement on Form F-4, the
 Solicitation/Recommendation Statement on Schedule 14D-9 and related
 exchange offer materials, including a letter of election and transmittal,
 to shareholders of Digene upon commencement of the exchange offer. These
 documents contain important information about the transaction and should be
 read before any decision is made with respect to the exchange offer.
 Investors and stockholders will be able to obtain free copies of these
 documents through the website maintained by the Securities and Exchange
 Commission at www.sec.gov. Free copies of these documents may also be
 obtained from QIAGEN, by directing a request to QIAGEN's IR department at
 QIAGEN Strasse 1, 40724 Hilden, Germany, or from Digene, by directing a
 request to Digene at 1201 Clopper Road, Gaithersburg, MD, 20878.
     In addition to the Registration Statement on Form F-4, Schedule TO,
 Prospectus, Solicitation/Recommendation Statement on Schedule 14D-9 and
 related exchange offer materials, both QIAGEN and Digene file or furnish
 annual, quarterly and special reports, proxy statements and other
 information with the Securities and Exchange Commission. You may read and
 copy any reports, statements or other information filed or furnished by
 QIAGEN or Digene at the SEC's Public Reference Room at Station Place, 100 F
 Street, N.E., Washington, D.C. 20549. You can request copies of these
 documents by writing to the SEC and paying a fee for the copying cost.
 Please call the SEC at 1-800-SEC-0330 for more information about the
 operation of the Public Reference Room. QIAGEN's and Digene's SEC filings
 are also available to the public at the SEC's web site at
 http://www.sec.gov, or at their web sites at www.qiagen.com or
     Use of Non-GAAP Financial Measures
     In addition to the financial measures prepared in accordance with
 generally accepted accounting principles (GAAP), we use the non-GAAP
 financial measure "adjusted EPS." Adjusted EPS excludes the write-off and
 amortization of acquisition-related intangible assets, and tax
 provisions/benefits related thereto. Adjusted EPS is not a measure of
 operating performance under GAAP. We believe that the use of adjusted EPS
 helps investors to gain a better understanding of our core operating
 results and future prospects, consistent with how management measures and
 forecasts our performance, especially when comparing such results to
 previous periods or forecasts. When analyzing our operating performance,
 investors should not consider adjusted EPS as a substitute for net income
 per share prepared in accordance with GAAP.
     QIAGEN                               Digene
     Investors:                           Investors:
     Dr. Solveigh Mahler                  Al Fleury
     011-49-2103-29-11710                 +1-301-944-7028
     Media:                               Media:
     Dr. Thomas Theuringer                Pam Rasmussen
     011-49-2103-29-11826                 +1-301-944-7196