Dive Brief:
- 23andMe CEO Anne Wojcicki filed a preliminary indication of interest to take the DNA testing company private.
- Wojcicki would pay 40 cents per share to acquire all outstanding shares of the company. 23andMe announced the proposal on Thursday.
- 23andMe’s shares have traded below $1 for nearly a year, and the company faces the risk of being delisted from Nasdaq. The board formed a special committee in March to review strategic alternatives, and Wojcicki first announced her interest in April of taking 23andMe private.
Dive Insight:
Wojcicki co-founded 23andMe in 2006, three years after the first human genome was sequenced. The once-buzzy startup went public in 2021 through a merger with a special purpose acquisition company that valued 23andMe at $3.5 billion. Now, 23andMe’s market cap is just $202.9 million.
The company’s sales have declined in the past year as fewer people buy home DNA tests, which make up the bulk of its business. The company’s revenue declined 27% year over year to $219.6 million in the fiscal year ending March 31. It has been operating at a net loss for the last three years.
When Wojcicki first announced her intention to take 23andMe private, she said she would not be willing to support any alternative transaction. Wojcicki reiterated that in a Monday filing with a non-binding proposal to buy the rest of the company.
She currently holds 22.5% of the company’s outstanding Class A common stock and 59.2% of outstanding Class B common stock, according to a Wednesday research note from TD Cowen. As of April, she held nearly half of the voting power for 23andMe’s total outstanding shares.
A potential deal would be fully financed by equity, and Wojcicki continues to meet with prospective sources of funding, according to the filing.
The special committee is reviewing Wojcicki’s proposal, the filing stated, but “there can be no assurance that the foregoing will result in any particular outcome.”
In April, Cowen analysts wrote that 23andMe going private under Wojcicki is “the new most likely outcome which should be welcomed by investors.”