(Adds details on the deal)
Nov 1 (Reuters) - Gene sequencing company Illumina Inc said here on Thursday it plans to buy smaller rival Pacific Biosciences of California Inc in an all-cash deal valued at $1.2 billion, expanding its capabilities as the market grows.
Illumina's offer of $8 per Pacific share represents a premium of about 77 percent to Pacific's Thursday close.
Illumina is a major player in the nascent gene sequencing space and last year unveiled its NovaSeq sequencing platform, which is designed to deliver faster and cheaper gene sequencing over existing models.
Gene sequencing is a method to analyze the genome, and can among other uses, help identify inherited disorders and markers of disease progression.
Evercore ISI analysts said the deal is a positive as it allows Illumina to deploy capital in a constructive manner as it will acquire a leader in long-read sequencing technology, thus complementing the company's current portfolio.
"PacBio's unmatched accuracy mirrors that of Illumina's in short-read sequencing," said Francis deSouza, President and Chief Executive Officer of Illumina.
"Combining the two technologies positions us to reach more applications and accelerate the pace of genomic discovery."
Goldman Sachs & Co LLC is serving as financial adviser and Covington & Burling LLP as legal adviser to Illumina.
Centerview Partners LLC is serving as financial adviser and Wilson Sonsini Goodrich & Rosati LLP as legal adviser to Pacific Biosciences. (Reporting by Ankur Banerjee in Bengaluru; Editing by Shounak Dasgupta, Bernard Orr)