Tempus AI agreed to buy genetic testing company Ambry Genetics for $375 million in cash and $225 million in shares.

Chicago-based Tempus, which makes AI-enabled precision medicine solutions, said the purchase will provide expanded testing capabilities for inherited cancer risk. Ambry, based in Aliso Viejo, California, is a leader in hereditary cancer screening and currently serves as Tempus’ main reference lab in the category, Tempus said in the Monday announcement.

Tempus also expects the acquisition to expand the company into new disease categories including pediatrics, rare disease, immunology, reproductive health and cardiology.

Tempus CEO Eric Lefkofsky told investors on a Monday earnings call that Tempus currently offers hereditary testing and it’s one of the company’s main product categories.

“It’s critical to us because we want to capture patients early, we want to be there for them when they're being treated, we want to be there monitoring their disease over time,” Lefkofsky said. The Ambry acquisition fits into the company’s belief that “more and more physicians and care teams and oncologists are going to want to work with those labs that can help them treat their patients from beginning to end and not work with five different labs,” the CEO added.

In a letter to customers, Ambry CEO Tom Schoenherr said Ambry will operate as a wholly owned subsidiary of Tempus, retain employees and continue its full menu of testing services.

Tempus will pay $600 million in total consideration for Ambry — $375 million in cash and $225 million in equity over the next year. The company will finance the deal through a $300 million increase in short- and long-term debt.

Ambry is expected to generate $300 million in revenue in 2024, and its revenues are growing by more than 25% per year, Lefkofsky said in a statement.

The acquisition is expected to close in the first quarter of 2025.