Tempus AI agrees to buy Personalis for $16.25 a share, an enterprise value of $1.5bn

Tempus AI has agreed to buy the cancer-testing company Personalis. In a statement filed with the Securities and Exchange Commission on July 20, Tempus AI (NASDAQ: TEM) said it had entered a definitive agreement to acquire all outstanding shares of Personalis (NASDAQ: PSNL) that it does not already own, at $16.25 per share, an enterprise value of $1.5bn net of the stake Tempus already holds. Both boards have approved it.

The price is a 6 percent premium to Personalis stock at Friday's close and a 28 percent premium to its unaffected 30-day volume-weighted average. The consideration is structured as stock. Personalis holders will receive a floating ratio of Tempus shares, capped at 0.3356 Tempus shares for each Personalis share, with the final ratio set closer to completion. Tempus may elect to pay cash instead for up to half of the total, funded from cash on hand and its existing credit lines.

The target here is a test. Personalis makes NeXT Personal, a minimal residual disease test that looks for small traces of circulating tumor DNA to track whether a cancer is responding to treatment or returning, and it carries Medicare coverage in three indications. The two companies have worked together since November 2023, when Tempus invested in Personalis and began commercializing that test. Tempus described minimal residual disease as a $20bn market opportunity. Personalis reported preliminary second-quarter revenue of $22.4m on 10,384 clinical tests, a 33 percent rise in volume from the prior quarter.

Closing is expected in late 2026 or early 2027. It depends on approval by Personalis shareholders, applicable regulatory clearances and the usual closing conditions, so nothing changes for either company until then.