Recursion Goes AI Shopping: Acquires Cyclica and Valence for a Cool $87.5 Million!

WHO Recursion, a clinical stage TechBio company, is acquiring Cyclica and Valence, two AI-enabled drug discovery companies.

WHAT Cyclica has developed MatchMaker™, an AI-enabled engine for small molecule drug discovery, and POEM™, a similarity-based property prediction model. Valence has pioneered low-data learning in drug design, unlocking the ability to design differentiated small molecules with improved properties and function.

WHY The acquisitions of Cyclica and Valence will add digital chemistry, machine-learning, and artificial intelligence capabilities to Recursion's existing large-scale automated wet-laboratories and supercomputing capabilities.

ACQUISITION TERMS Recursion has agreed to acquire Cyclica for $40 million and Valence for $47.5 million, with customary closing and post-closing purchase price adjustments. The purchase price for each acquisition will be paid in the form of Recursion Class A common stock shares, subsidiary shares exchangeable for Recursion's Class A common stock shares, and the assumption of certain outstanding options from Valence and Cyclica. In certain limited circumstances, nominal cash consideration may be paid to Valence and Cyclica shareholders instead of exchangeable shares or Recursion Class A common stock. These acquisitions are not expected to materially impact Recursion's cash runway. Recursion anticipates completing both acquisitions in Q2 2023, subject to meeting applicable closing conditions.

KEY TAKEAWAY Recursion is creating an AI-first digital chemistry and drug discovery solution with the acquisitions of Cyclica and Valence.