Mallinckrodt to acquire Ocera Therapeutics for $1.52 per share plus CVR

Mallinckrodt (MNK) and Ocera Therapeutics (OCRX) announced that they have entered into an agreement under which Mallinckrodt will acquire Ocera, a clinical stage biopharmaceutical company focused on the development and commercialization of novel therapeutics for orphan and other serious liver diseases with high unmet medical need. Ocera’s developmental product OCR-002, an ammonia scavenger, is being studied for treatment of hepatic encephalopathy, a neuropsychiatric syndrome associated with hyperammonemia, a complication of acute or chronic liver disease.

A subsidiary of Mallinckrodt will commence a cash tender offer to purchase all of the outstanding shares of Ocera Therapeutics common stock for $1.52 per share, or approximately $42M, plus one Contingent Value Right to receive one or more payments in cash of up to $2.58 per share, or up to approximately $75M, based on the successful completion of certain development and sales milestones.

Mallinckrodt expects dilution from the acquisition to adjusted diluted earnings per share by 25c-35c annually beginning in 2018, assuming the expected 2017 close.

“Guidance on the impact of the acquisition to the company’s GAAP 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 company said.

Subject to customary closing conditions, the company estimates the transaction will close in the fourth quarter of 2017.

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