Recursion and Exscientia. An AI Leader Emerges

Management consultants say that most M&A events don’t realize the synergies penciled on paper prior to the deal being finalized. Only after the transaction do executives find out where the bodies are buried, something that’s sometimes (coincidentally, of course) accompanied by sudden dramatic personnel changes. The whole point of a synergy is that 1 + 1 = 3. So, when a merged company suddenly has two of everything – two CEOs, two CTOs, two CMOs – heads are going to fly, and it’s usually the more dominant company that comes out ahead. Today, we’re going to cover the merger of two AI drug discovery firms – Recursion (RXRX) and Exscientia (EXAI). One we’ve been avoiding, and one we’ve been ogling from afar. Here are our most recent notes in the Nanalyze Tech Stock Catalog:

While the deal isn’t expected to close until early next year, we’re due for our annual check in with AI drug discovery stocks, so let’s take a closer look starting with the deal terms.

Recursion Merges With Exscientia

Exscientia shareholders will receive 0.7729 shares of Recursion stock for each Exscientia ordinary share they own. So, one share of EXAI at $5.33 will be replaced with 0.7729 shares of RXRX which would be worth almost the same – $5.34. See how that works? When the market prices both halves of a potential tra