Pharmaceutical companies Alkermes and Elan Drug Technologies are set to merge in a cash and stock transaction valued at $960 million (£585 million).
Pharmaceutical companies Alkermes and Elan Drug Technologies are set to merge in a cash and stock transaction valued at $960 million (£585 million).
The two businesses will be combined under a new holding company incorporated in Ireland, and trade under the name of Alkermes plc (Alkermes).
Richard Pops, CEO of US-based Alkermes, comments: ‘The merger will be financially transformative and create a profitable, global biopharmaceutical company with a diversified CNS [central nervous system] product portfolio and a strong foundation for growth.’
Under the terms of the deal, Irish-headquartered Elan is to receive $500 million in cash and 31.9 million ordinary shares of newly formed Alkermes common stock. Alkermes has obtained $450 million in term loans from Morgan Stanley & Co and HSBC to finance the transaction.
According to a statement released by the company the merger will allow for complementary new drug development capabilities.
CEO of Elan, Kelly Martin, says that the transaction aggressively advances a number of long-standing strategic and financial objectives for Elan.
Martin adds: ‘Namely, it enables us to reduce the debt on our balance sheet and further improve our capital structure, increases operating leverage and provides Elan shareholders with the opportunity to realise further value, over time, from the equity position in Alkermes.’
