SoftBank Takes Stake in DNA Firm Pacific Biosciences

(Bloomberg) -- SoftBank Group Corp. has taken a stake of about 6% in Pacific Biosciences of California Inc., a U.S. DNA-sequencing company whose stock has risen sevenfold in the last year, according to a person with knowledge of the investment.

The stake, currently worth more than $350 million, highlights the fast-expanding portfolio of public equity investments by SoftBank’s asset management unit SB Northstar, said the person, who asked not to be named as its investment decisions are private. SoftBank has spent about $20 billion on stocks and derivatives through the unit, in which Masayoshi Son, its billionaire founder, personally holds one-third of the stake.

Shares in Pacific Biosciences rose 15% Friday on news of the investment before trading was halted. Representatives for SoftBank and Pacific Biosciences declined to comment.

While SB Northstar is continuing to wind down controversial derivative positions in big tech companies after a backlash from investors, it has taken equity stakes in a variety of companies. It recently invested in Norway-based education software provider Kahoot! AS, and bought one-tenth of Swedish cloud-based platform provider Sinch AB.

Pacific Biosciences, based in Menlo Park, California, went public about a decade ago. It makes DNA sequencing machines, an area of biotechnology that’s experiencing a surge in interest from drugmakers, hospitals and research institutions. Its machines use a technology that can decode extensive stretches of DNA with a high degree of accuracy, particularly in difficult-to-analyze circumstances. The company has said its work has contributed to research into the Covid-19 disease.

In January 2020, the company was blocked by U.S. antitrust enforcers from merging with rival Illumina Inc. in what would have been a $1.1 billion deal. It held a secondary stock offering last summer that has driven a ninefold increase in the share price since then, giving the company a market value of $6.5 billion.

(Updates with share move in the third paragraph.)