April 7, 2014
(Editor’s Note: This post is an excerpt from an article appearing in Practitioner Insights on WestlawNext)
Minneapolis-based biotechnology company Techne Corp., which does business under the name Bio-Techne, made an equity investment in CyVek Inc., a Connecticut-based, privately funded biotech company, on April 2. The investment gives Bio-Techne, through its subsidiary, the opportunity to acquire CyVek if CyVek achieves certain milestones.
Investment and board observer seat
Under the terms of the agreement of investment and merger, Research & Diagnostic Systems Inc. (R&D), a wholly owned subsidiary of Bio-Techne, made a $10 million investment in CyVek. In return, R&D received CyVek common shares representing 19.99 percent of its outstanding voting stock.
As a result of its investment, R&D will become a party to CyVek’s investor agreements and obtain an observer seat on CyVek’s board of directors. As such, R&D will be permitted to attend and participate in CyVek’s board meetings and to receive information provided to board members. Since R&D’s board seat is merely as an observer, however, the representative will not be permitted to formally vote on any matter.
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