Personalis, Inc. (PSNL) announced that on July 20, 2026, it entered into a definitive merger agreement to be acquired by Tempus AI, Inc. in a stock-based transaction that values Personalis shares at $16.25 apiece, subject to the exchange-ratio mechanics and possible partial cash election described in the agreement. Under the Agreement and Plan of Merger, Tempus will acquire Personalis through a two-step merger structure involving two wholly owned Tempus subsidiaries: Aviary Development, Inc., a Delaware corporation, and Toucan Development, LLC, a Nevada limited liability company. First, Aviary Development will merge with and into Personalis, with Personalis surviving as a wholly owned subsidiary of Tempus. Immediately afterward, Personalis will merge with and into Toucan Development, with Toucan surviving as the final wholly owned Tempus subsidiary. The parties intend the transaction to qualify as a tax-free reorganization under Section 368(a) of the Internal Revenue Code. For each eligible share of Personalis common stock outstanding immediately before closing, holders will receive shares of Tempus Class A common stock based on an exchange ratio. If the volume-weighted average price of Tempus Class A common stock over the applicable 15-trading-day measurement period is $48.42 or less, the exchange ratio will be fixed at 0.3356 Tempus shares for each Personalis share. If the Tempus stock price is above $48.42, the exchange ratio will equal $16.25 divided by the Tempus stock price. Personalis stockholders will also receive cash in lieu of fractional Tempus shares and any post-closing distributions, if applicable. Tempus has the right to elect to pay cash for up to 50% of the outstanding Personalis shares, subject to reduction if needed to preserve the intended tax treatment. If Tempus makes that election, the cash portion would be paid at $16.25 per Personalis share, without interest, allocated pro rata among eligible holders, while the remaining shares would receive Tempus Class A common stock. Shares held by Personalis as treasury stock, shares held by Tempus or its controlled affiliates, and shares held by stockholders who properly exercise appraisal rights will not receive the standard merger consideration. The merger agreement also sets out detailed treatment for Personalis equity awards. Certain in-the-money Personalis options held by former employees, non-employee directors, or current service providers whose options are vested and exercisable will be canceled and converted into the right to receive Tempus stock consideration for the net option shares. Other outstanding Personalis options will generally be assumed by Tempus and converted into options to buy Tempus Class A common stock, with the share number multiplied by the exchange ratio and the exercise price divided by the exchange ratio. Out-of-the-money Personalis options will be canceled for no consideration. Personalis restricted stock units will also be treated differently depending on the holder. RSUs held by Personalis directors will fully vest immediately before the merger and be canceled in exchange for Tempus stock consideration. Other RSUs will be assumed by Tempus and converted into Tempus RSUs using the exchange ratio. For performance stock units, a pro rata portion will vest based on the number of full calendar quarters elapsed in the applicable measurement period through closing, and those vested PSUs will be exchanged for Tempus stock consideration. The remaining unvested PSUs will be converted into Tempus RSUs and will vest on a time-based schedule in equal quarterly installments through the end of the original measurement period, subject to continued service. The Personalis employee stock purchase plan will be wound down in connection with the transaction. No new participants may join the current offering periods, and existing participants may not increase payroll deductions. If the merger closes, the ESPP will terminate immediately before the effective time. If an offering period remains open at closing, its final purchase date will be accelerated to within 10 business days before the closing date. Both companies’ boards approved the merger agreement, and Personalis’ board resolved to recommend that Personalis stockholders vote to adopt it. Closing remains subject to several conditions, including approval by holders of a majority of Personalis’ outstanding shares entitled to vote, effectiveness of a Tempus Form S-4 registration statement for the Tempus shares to be issued, Nasdaq listing approval for those shares, antitrust clearance under the Hart-Scott-Rodino Act and any other required regulatory approvals, tax-opinion delivery, compliance with covenants, accuracy of representations and warranties, and the absence of a material adverse effect affecting either company. Personalis agreed to customary “no-shop” restrictions, limiting its ability to solicit competing acquisition proposals. However, its board may engage with a third party that submits a written proposal if the board determines in good faith, after consulting advisers, that the proposal constitutes or could reasonably lead to a superior proposal and that failing to engage would be inconsistent with its fiduciary duties. The agreement gives Tempus notice and matching rights in certain circumstances. The merger agreement includes a termination fee of approximately $76.8 million payable by Personalis to Tempus under specified circumstances, including if Tempus terminates after a Personalis board adverse recommendation change. The fee can also apply if a competing proposal is publicly disclosed before termination and Personalis enters into and completes an alternative acquisition within 12 months. Tempus may owe Personalis a reverse termination fee of approximately $76.8 million in specified antitrust-related circumstances tied primarily to Tempus’ breach of regulatory obligations. Personalis also has a limited right to terminate if the final Tempus stock price used for the exchange ratio is below $46.00, exercisable only during a short period shortly before the scheduled closing. In a related voting agreement signed the same day, Merck Sharp & Dohme LLC, a Personalis stockholder, agreed to vote its Personalis shares in favor of adopting the merger agreement and against competing transactions or actions that could impede the deal. As of July 20, 2026, Merck held approximately 13% of Personalis’ outstanding voting power. The voting agreement generally terminates upon closing, termination of the merger agreement, certain adverse amendments affecting Merck’s consideration or deal obligations, or mutual consent. The filing reports a major strategic transaction for Personalis: a board-approved sale to Tempus AI with a headline value tied to $16.25 per Personalis share, principally in Tempus Class A stock with a possible cash component. The deal is not yet completed and will require stockholder approval, regulatory clearance, and satisfaction of other closing conditions.