Mallinckrodt to acquire Sucampo for $18.00 per share

Mallinckrodt (MNK) and Sucampo Pharmaceutical (SCMP) 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, 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 is approximately $1.2B.

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 30c 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 GAAP 35c 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.

MNK closed at $23.32. SCMP closed at $17.00.

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