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Mallinckrodt to offload BioVectra
Posted on Tuesday, 10 September 2019 14:22
Irish speciality pharmaceuticals maker Mallinckrodt has unveiled plans to divest Canadian contract drug maker BioVectra to HIG Capital.
The company said the parties have reached an agreement for a deal worth USD 250.00 million.
Under the terms of the transaction, the consideration comprises an upfront payment of USD 135.00 million, as well as a long-term note for USD 40.00 million and contingent earn-out of up to USD 75.00 million.
Completion is slated to follow during the fourth quarter of 2019, subject to certain conditions.
Proceeds of the deal will be used to repay some of Mallinckrodt’s debts, in line with its previously disclosed capital allocation priorities.
All of BioVectra’s staff in Prince Edward Island and Nova Scotia are included in the sale, as are its employees.
Commenting on the decision to divest the business, Mallinckrodt chief executive Mark Trudeau said: “This transaction continues to advance Mallinckrodt's strategic focus on branded, high-growth biopharmaceuticals by monetising a non-core business.
"While we recognise the longer-term growth potential for BioVectra, we believe that the structure of this deal enables us to participate in the future success of the business, and therefore we see this sale as the best option for both Mallinckrodt and BioVectra moving forward."
HIG Capital managing director Mike Gallagher said the target is in a good position to capitalise on increasing demand for its services.
According to Zephyr, the M&A database published by Bureau van Dijk, Mallinckrodt’s most recent asset sale was announced in January 2017, when the group agreed to sell its intrathecal therapy business to Piramal Critical Care for USD 203.00 million.
The firm was also active as an investor in July of this year, when it participated in a GBP 4.00 million capital increase by London-headquartered Silence Therapeutics, a provider of clinical-stage therapeutics research and development services.
© Zephus Ltd