Texas Oilman Pitches To Buy 23andMe for $100 Million
Ryan Sitton—the former Texas Railroad Commissioner and founder of engineering firm Pinnacle—has made an unsolicited offer to acquire the beleaguered DNA-testing company 23andMe (NASDAQ: ME) for $100 million.
“We will offer $100 million for @23andMe today. Consider the option. Pinnacle is a leader in complex system analysis. Regardless of the ‘machine’ (pumps, pipe, or human body), combining our algorithms with your data gives people more insight into long-term health than ever before,” Sitton wrote on social media.
The embattled 23andMe board has already shown a low tolerance for takeover offers deemed inadequate. CEO Anne Wojcicki’s own attempt to buy out shareholders at $0.41 per share was rejected as “not in the best interest of shareholders,” making the company’s shares sharply decline by 33% earlier this week.
Wojcicki’s move follows a disastrous collapse of a previous $2.53-a-share joint bid she made with New Mountain Capital, but the latter withdrew its interest soon after. The proposal was also met with fierce opposition, eventually leading to the mass resignation of the board.
In their resignation letter, board members expressed frustration over the lack of a detailed plan for the company’s future, adding to the growing uncertainty around 23andMe’s direction.
The company, once lauded for popularizing consumer DNA-testing kits, faces lawsuits, data-breach concerns, a mass board resignation, and dwindling cash reserves. Investors have watched the stock tumble by double digits in the past year, and the fear of bankruptcy or liquidation looms large.
READ: 23andMe’s Financial Freefall Sparks Fears Over Genetic Data Security
Enter Sitton’s offer at an eye-popping $100 million, which is more than double the company’s current market cap of around $40 million. Arguably, the deal could undervalue a platform that boasts genetic information from more than 15 million people. Earlier, observers already worry about the fate of the genetic gold mine, which Pinnacle can unearth if it wins the day. While 23andMe has pledged to protect customer privacy, trust in the company eroded after it was revealed that law enforcement and third parties had sought access to customer data.
Before dabbling in politics, Sitton spent years applying engineering models to refinery equipment and pipelines. He’s a mechanical engineer by training who built a career in the energy business—first working for major oil companies, then founding his own engineering and technology firm, Pinnacle, that consults for refineries, chemical plants, and other large industrial facilities.
He now posits that the same methodology used to predict pump or pipeline failures could be applied to the human body.
23andMe last traded at $1.51 on the NASDAQ.
Information for this briefing was found via TipRanks and the sources and companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
