Summary
On January 10, 2025, Quanterix Corporation (QTRX) announced an all-stock acquisition of Akoya Biosciences (AKYA). AKYA shareholders will receive 0.318 shares of QTRX for each AKYA share. The deal is expected to close in Q2 2025, pending shareholder and regulatory approvals.
With QTRX trading at $7.60, the implied offer price for AKYA is $2.41 per share, representing a 16% upside. The current spread between AKYA’s price and the implied offer is 14.24%, suggesting an 85.76% chance the deal will close.
AKYA’s current price of $2.06 offers significant return potential, with a price target of $2.65 or higher. While the deal's closure depends on approvals, the current price provides a solid margin of safety, despite risks from potential share dilution and market uncertainties.
Catalyst
On January 10, 2025 at 7:00 AM EST, Quanterix Corporation (NASDAQ : QRTX), a company fueling scientific discovery through ultra-sensitive biomarker detection, and Akoya Biosciences (NASDAQ: AKYA), The Spatial Biology Company®, announced a definitive merger agreement under which QTRX will acquire AKYA in an all-stock transaction [1].
Under the terms of the agreement, which was approved by Board of Directors of both companies, AKYA shareholders will receive 0.318 shares of QTRX common stock for each share of Akoya common stock owned [1]. Upon closing of the transaction, QRTX shareholders will own approximately 70% of the combined company and AKYA shareholders will own approximately 30%, on a fully diluted basis. [1]
The transaction is expected to close in Q2 of 2025, subject to approval by both companies' shareholders, expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, and satisfaction of other customary closing conditions [1].
Analytical Framework Outline
We employ a reference-based valuation methodology, predicated on the assumption that the closing price immediately preceding the disclosure of the catalyst represents an efficient market valuation, incorporating all material public and private information. This approach enables us to isolate both the actual and potential impact of the catalyst on the share price. In this analysis, we have designated January 8, 2025, as the reference date, with the closing price on that date serving as the reference price.
Our analysis proceeds in two stages. First, we assess the offer price and potential future valuation of AKYA in light of the disclosed transaction terms, evaluating the potential upside. Additionally, we examine the probability of the deal closing by analyzing the spread between the implied buyout price and the current market price, as this differential reflects market expectations regarding the likelihood of completion. Second, we evaluate the financial implications for QTRX arising from the acquisition costs associated with the disclosed transaction and assess their potential effect on AKYA’s share price.
AKYA Implied Offer Price
The implied offer price for AKYA common stock can be determined by referencing the market price of QTRX and applying the transaction terms, which stipulate that AKYA shareholders will receive 0.318 shares of QTRX common stock for each AKYA share owned. As of the time of analysis, QTRX is trading at $7.60 per share, implying that, if the acquisition were approved and executed immediately, AKYA would be valued at approximately $2.41 per share. This represents a potential upside of approximately 16%.
However, any sophisticated investor understands that AKYA’s stock price is unlikely to immediately reflect the implied offer price, as uncertainties surrounding the successful completion of the acquisition remain. These uncertainties include, but are not limited to, shareholder approval and regulatory clearance. Such risks typically result in the target company’s stock trading at a discount to the implied offer price, creating a spread that reflects the market’s assessment of the likelihood and timing of deal closure. As of the time of analysis, this spread stands at 14.24%, implying an estimated 85.76% probability that the transaction will successfully close. [Figure 1 & 2]
Figure [1]: QTRX, AKYA Prices & P(Deal Close)
Figure [2]: Historical P(Deal Close)
QTRX & Impact of Acquisition Costs
A declining or volatile probability of deal closure presents a significant risk when considering an investment aimed at capturing the spread in the target firm. In fact, this represents the most critical risk to the investment thesis, particularly in an all-stock transaction as opposed to a pure cash deal. Unlike a fixed cash consideration, an all-stock offer is inherently non-stationary, as the final acquisition price fluctuates with the market value of the acquirer's shares. This added uncertainty increases the risk that the ultimate offer price at closing may differ materially from initial expectations, potentially disrupting an investor’s anticipated rate of return.
For this reason, it is essential to concurrently assess the potential worst-case scenario for QTRX’s share price to determine the margin of safety associated with the catalyst. The most significant risk to QTRX’s share price arises if the market discounts the long-term value accretion of the acquisition and instead prices in concerns over the transaction’s associated costs. Should investor sentiment shift negatively in this regard, it could materially impact the implied offer price for AKYA and the overall investment thesis.
With the current implied offer price for AKYR at $2.41, based on the transaction terms and QTRX’s prevailing share price, and with AKYR’s total outstanding shares at 49,572,750 per the latest filing, the estimated acquisition cost stands at approximately $120 million. At QTRX’s current share price, this translates to an issuance of approximately 15.76 million new shares, resulting in an estimated dilution of 29.01% for existing shareholders. If dilution were the primary risk factor driving downside pressure, the worst-case scenario estimate places QTRX’s post-transaction share price at approximately $8.33. A detailed calculation for this scenario is attached below.
Putting it All Together
At the current share price of $2.06 for AKYR, and with QTRX trading below the price estimate that accounts for the full costs of the proposed acquisition, coupled with a favorable spread on AKYR’s stock based on the transaction terms, the market price presents significant return potential while offering a solid margin of safety for protecting investment principal. With a price target for AKYR of $2.65 or higher, the current price offers substantial upside potential. While the probability of the deal closing remains uncertain and contingent on various approval processes, the current price provides strong protection against these risks and uncertainties.
Sources:
[1] Press Release : Quanterix to Acquire Akoya Biosciences, Creating the First Integrated Solution for Ultra-Sensitive Detection of Blood- and Tissue-Based Protein Biomarkers | Business Wire
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