Assertio Holdings, Inc. (ASRT), a specialty pharmaceutical firm, and Spectrum Pharmaceuticals, Inc. (SPPI), announced on Tuesday that they have agreed for Assertio to buy Spectrum in an all-stock and contingent value rights transaction.
Following the news, ASRT was trading down by 10.94 percent at $5.70 per share in the pre-market trading on Nasdaq.
ASRT expects the acquisition to add to its earnings after the conclusion of the deal, which is expected in the third quarter. The new company is projected to generate double-digit accretion to adjusted income per share in 2024.
According to the deal, Spectrum shareholders will receive a fixed exchange ratio of 0.1783 shares of Assertio for each share of Spectrum, implying an upfront value of $1.14 per Spectrum share or around $248 million.
The transaction is based on Assertio’s stock price on April 24 and an initial 65% premium to Spectrum’s closing price on such date.
In addition, Spectrum stockholders will receive one CVR per Spectrum share entitling them to receive up to an additional $0.20 per share in total or around $43 million, payable in cash or stock at Assertio’s election, for $1.34 or around $291 million, a total potential premium of 94 percent.
Post transaction, Assertio shareholders will own around 65 percent of the combined company, and Spectrum stockholders will own approximately 35 percent.
Dan Peisert, CEO of Assertio, said: “The addition of Spectrum’s commercial capabilities and ROLVEDON, a novel long-acting G-CSF product recently launched into a blockbuster market in October 2022, exemplifies Assertio’s attractiveness as an acquirer of new, accretive assets across diverse therapeutic categories, and ability to continue their growth and achieve profitable contributions faster and more efficiently than could be achieved on a standalone basis. We intend to retain the majority of Spectrum’s commercial infrastructure, which we believe is synergistic to our digital non-personal platform.”
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