Mallinckrodt’s $1.2 Billion Acquisition of Sucampo

Deutsche Bank served as Mallinckrodt’s exclusive financial advisor; Wachtell, Lipton, Rosen & Katz served as its exclusive legal advisor. Jefferies LLC served as Sucampo’s exclusive financial advisor; Cooley LLP served as its exclusive legal advisor.

Mallinckrodt plc (NYSE: MNK), a leading global specialty pharmaceutical company, and Sucampo Pharmaceuticals, Inc. (NASDAQ: SCMP), a global biopharmaceutical company, today announced that they have entered into an agreement under which Mallinckrodt will acquire Sucampo, including its commercial and development assets. The transaction was approved by the Boards of Directors of both companies.

Sun Acquisition Co., a subsidiary of Mallinckrodt, will commence a cash tender offer to purchase all of the outstanding shares of Sucampo Pharmaceuticals’ common stock for $18.00 per share. The total transaction value (including anticipated payments in respect of Sucampo’s debt) is approximately $1.2 billion. The acquisition is expected to be funded through borrowings under Mallinckrodt’s existing revolving credit facility, a new secured term loan facility and/or cash on hand. Following the transaction, Mallinckrodt intends to utilize its significant cash generation to focus on reducing outstanding debt over time.

Sucampo stockholders holding approximately 32% of the outstanding Sucampo shares have entered into a tender and support agreement for this transaction.

Mallinckrodt expects accretion from the acquisition to adjusted diluted earnings per share of at least $0.30 in 2018 and at least double that amount in 2019, assuming a first quarter 2018 close.

Guidance on the impact of the acquisition to the company’s GAAP35 diluted earnings per share has not been provided due to the inherent difficulty of forecasting the timing or amount of items that would be included in calculating such impact.

The transaction is subject to customary closing conditions, including expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act, and the tender of a majority of the outstanding Sucampo shares.

Sucampo Pharmaceuticals, Inc. is a biopharmaceutical company focused on the development and commercialization of highly specialized medicines. Sucampo has a late-stage pipeline of product candidates in clinical development for orphan disease areas, including VTS-270, a mixture of 2-hydroxypropyl-B-cyclodextrins with a specific compositional fingerprint that has been granted orphan designation in the U.S. and Europe and is in a pivotal Phase 2/3 clinical trial for the treatment of Niemann-Pick Disease Type C, a rare progressive genetic disorder. VTS-270 has also been granted breakthrough therapy designation in the U.S. Sucampo has an exclusive option for the North American rights to CPP-1X/sulindac, which is in Phase 3 development for the treatment of familial adenomatous polyposis and has been granted orphan drug designation in the U.S. The company has two marketed products – AMITIZA and RESCULA.

Mallinckrodt is a global business that develops, manufactures, markets and distributes specialty pharmaceutical products and therapies. Areas of focus include autoimmune and rare diseases in specialty areas like neurology, rheumatology, nephrology, pulmonology and ophthalmology; immunotherapy and neonatal respiratory critical care therapies; and analgesics and hemostasis products. The company’s core strengths include the acquisition and management of highly regulated raw materials and specialized chemistry, formulation and manufacturing capabilities. The company’s Specialty Brands segment includes branded medicines and its Specialty Generics segment includes specialty generic drugs, active pharmaceutical ingredients and external manufacturing.

Cooley advised Sucampo with a team led by Barbara Borden (Picture) and Christian Plaza.

Debevoise & Plimpton LLP is advising Deutsche Bank as financial advisor to Mallinckrodt plc with Andrew L. Bab, Giselle Alvarado and Claire Hansen Suni.

 

Involved fees earner: Barbara Borden – Cooley LLP; Christian Plaza – Cooley LLP; Marc Samuel – Cooley LLP; Kerry Killeen – Cooley LLP; Matthew Schwee – Cooley LLP; Andrew Gunther – Cooley LLP; Mike Faber – Cooley LLP; Stephanie Gentile – Cooley LLP; David Walsh – Cooley LLP; Mary Maher Lewis – Cooley LLP; Michael Tollini – Cooley LLP; Jonathan Bagg – Cooley LLP; Brian Leaf – Cooley LLP; Brenden Rowook Park – Cooley LLP; Jacqueline Grise – Cooley LLP; Sharon Connaughton – Cooley LLP; Erich Veitenheimer – Cooley LLP; Natasha Leskovsek – Cooley LLP; Andrew Bab – Debevoise & Plimpton; Giselle Alvarado – Debevoise & Plimpton; Claire Hansen Suni – Debevoise & Plimpton;

Law Firms: Cooley LLP; Debevoise & Plimpton;

Clients: Deutsche Bank; Sucampo Pharmaceuticals, Inc.;

 

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Author: Ambrogio Visconti