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ADVANZ PHARMA To Acquire Correvio For Approximately $76M

Acquisition Expected to Have a Total Purchase Price of Approximately US$76 Million Including the Repayment of Certain Correvio Indebtedness ADVANZ PHARMA Intends to Pay for the Acquisition with Cash on Hand Provides

Benzinga · 03/16/2020 11:08

Acquisition Expected to Have a Total Purchase Price of Approximately US$76 Million Including the Repayment of Certain Correvio Indebtedness

ADVANZ PHARMA Intends to Pay for the Acquisition with Cash on Hand

Provides ADVANZ PHARMA with an Immediate and Direct Commercial Presence in Germany, France, Spain, Italy, and the Benelux region, While Strengthening its Existing Presence in the Nordics and the United Kingdom

Further Diversifies ADVANZ PHARMA's Portfolio of Medicines by Adding Established and Innovative High-Quality Brands Sold in Over 60 Countries Around the World

VANCOUVER, March 16, 2020 /PRNewswire/ - Correvio Pharma Corp. (NASDAQ:CORV) (TSX:CORV), a specialty pharmaceutical company focused on commercializing hospital drugs, today announced its entry into an arrangement agreement ("Arrangement Agreement") dated March 15, 2020, for ADVANZ PHARMA Corp. Limited ((&quot, ADVANZ PHARMA&quot, , TSX:ADVZ) to acquire all of the issued and outstanding shares of Correvio.  The acquisition, which will be executed through ADVANZ PHARMA's wholly-owned subsidiary Mercury Pharma Group Limited ("Mercury"), is expected to have a total purchase price of approximately US$76 million, which includes the repayment of certain Correvio indebtedness, pursuant to a plan of arrangement under the Canada Business Corporations Act (the "Arrangement").

ADVANZ PHARMA is a global pharmaceutical company with a diversified portfolio of more than 200 branded and unbranded products, and product sales in more 90 countries.

Mark H.N. Corrigan, MD, Chief Executive Officer of Correvio, commented: "Since announcing our intent to explore strategic alternatives in December 2019, we have diligently evaluated a number of opportunities and concluded that a partnership with ADVANZ PHARMA represents the best outcome for our shareholders and other stakeholders, including our employees. We believe that bringing the highly skilled and talented employees from the two organizations together will deliver increased scale, depth of commercial capability, breadth of geographical reach and complementary business models to bring important medicines to patients across the globe."

"Correvio's highly experienced  European commercial team provides us with a direct commercial presence in France, Germany, Spain, Italy and the Benelux region, while further strengthening our existing presence in the Nordics and the United Kingdom," said Graeme Duncan, Chief Executive Officer of ADVANZ PHARMA.  "Correvio's niche portfolio, consisting of an established brand, and two growing, patent-protected brands, plus a pipeline of potential product launches, are highly complementary to our current priorities and future focus.  This is a transformative transaction that we are very excited about, creating what we believe is a leading global platform with advanced commercial capabilities in Western Europe, which should enable us to access further portfolio opportunities going forward."

The Boards of Directors of both companies have unanimously approved the transaction, which remains subject to approval by Correvio securityholders.  The Board of Directors of Correvio unanimously recommends that Correvio shareholders vote in favour of the Arrangement.  The transaction is subject to customary closing conditions and is expected to be completed during the second quarter of 2020.

Piper Sandler is serving as financial advisor to Correvio.  Blake, Cassels & Graydon LLP is serving as legal counsel and Skadden, Arps, Slate, Meagher & Flom LLP is serving U.S. legal counsel to Correvio.  PJT Partners is serving as financial advisor, and Fasken Marinteau DuMoulin, and White & Case as legal advisors to ADVANZ PHARMA and its board of directors as part of the transaction.

Further Transaction Details

  • Under the terms of the transaction, ADVANZ PHARMA will be paying US$0.42 per issued and outstanding share (the "Consideration"), valuing Correvio's equity at approximately US$28 million on a fully diluted basis.
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  • Inclusive of the repayment of Correvio's outstanding debt of approximately US$48 million, this represents a total consideration of approximately US$76 million, excluding Correvio's cash assumed by ADVANZ PHARMA.
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  • ADVANZ PHARMA intends to pay for the acquisition of Correvio with its cash on hand. As of September 30, 2019, ADVANZ PHARMA's cash position was approximately US$243 million.
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  • As part of the transaction, (i) each holder of an in-the-money share purchase option of Correvio that is outstanding immediately prior to the effective time of the arrangement will be acquired for cancellation in consideration for a cash payment equal to the product obtained by multiplying the amount by which the Consideration exceeds the exercise price per share of such in-the-money option by the number of shares underlying such option; (ii) each holder of a restricted share unit or phantom share unit of Correvio that is outstanding immediately prior to the effective time will be acquired for cancellation for a cash payment equal to the Consideration; and (iii) all out-of-the-money share purchase options of Correvio will be cancelled for no consideration. All amounts are subject to applicable withholdings.
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  • Correvio has agreed to hold a meeting of its securityholders by no later than May 20, 2020 in order for shareholders to consider and, if deemed advisable, approve the transaction. Closing is subject to obtaining such shareholder approval, obtaining an interim and final order approving the transaction from the Supreme Court of British Columbia, and to certain other customary conditions as set out in the Arrangement Agreement.
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  • Each of Correvio and Mercury have provided representations and warranties customary for a transaction of this nature and Correvio has provided customary interim period covenants regarding the operation of its business in the ordinary course during such period. In addition, Correvio has agreed to certain non-solicitation covenants and has agreed to pay a termination fee of US$3.5 million in the event that it accepts a superior proposal, changes its recommendation that Correvio shareholders vote in favour of the transaction or in certain other circumstances, subject to certain customary exceptions.
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  • In connection with the transaction and subject to closing, Correvio will apply to have its shares delisted from the TSX and Nasdaq and Correvio will cease to be a reporting issuer under Canadian and U.S. securities law.
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  • A copy of the Arrangement Agreement, which appends a copy of the Plan of Arrangement, will be available on each of the ADVANZ PHARMA and Correvio SEDAR profiles at www.sedar.com.
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  • Each senior officer and director of Correvio has delivered to Mercury a voting support agreement pursuant to which each such officer and director has agreed to, among other things, vote such person's shares in favour of the shareholder resolution approving the transaction.
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  • The Correvio board of directors has received an opinion from its financial advisor, Piper Sandler Companies, that, subject to the assumptions and limitations contained therein, the transaction is fair, from a financial point of view, to the Correvio shareholders.