- Norgine to acquire all outstanding shares of Merus for
$1.65 per share in cash
TORONTO and AMSTERDAM, May 11,
2017 /CNW/ - Merus Labs International Inc. ("Merus"
or the "Company") TSX: MSL, NASDAQ: MSLI and Norgine B.V.
("Norgine") announced today that they have entered into a
definitive agreement (the "Arrangement Agreement") under
which Norgine will acquire all of the issued and outstanding common
shares of Merus for $1.65 per share
in cash including the assumption of all debt obligations, for a
total enterprise value of approximately $342
million (the "Arrangement"). The transaction will be
financed through a combination of available cash and new credit
facilities that Norgine has secured prior to executing the
Arrangement. The transaction price of $1.65 per share represents a premium of 63.4% to
the closing price of $1.01 on the TSX
on May 10, 2017 and a premium of
55.1% over the 30-day volume weighted average price of $1.06 on the TSX.
Norgine is a leading European specialist pharmaceutical company
with a direct commercial presence in all major European markets. In
2016, Norgine's total sales revenue was €295 million. It employs
over 1,000 people across its commercial, development and
manufacturing operations and manages all aspects of product
development, production, marketing, sales and supply.
Michael Cloutier, Chairman of
Merus, commented:
"After a comprehensive review of strategic alternatives, and
consultation with the Company's financial and legal advisors and
the Special Committee of Independent Directors, our Board has
unanimously concluded that this transaction is in the best
interests of the Company and our stakeholders. We are pleased that
this transaction appropriately recognizes the value of Merus'
stable legacy product portfolio and strong cash flow."
Peter Stein, Chairman and Chief
Executive Officer of Norgine, commented:
"Our acquisition of Merus will strengthen our position as the
'go-to' European specialist pharma company. The Merus team has
built a strong platform of established products. We look forward to
working closely with the Merus team to efficiently complete this
transaction and welcoming them to Norgine."
Transaction Details
The transaction is subject to court approval, and the approval
of the holders of at least 66⅔% of Merus' common shares present in
person or represented by proxy at a special meeting of Merus
shareholders to be called to consider the Arrangement. Directors
and senior executive officers of Merus, who together hold an
aggregate of approximately 5.7% of the issued and outstanding Merus
common shares (calculated on a non-diluted basis), have entered
into voting support agreements with Norgine in favour of the
Arrangement. The Company intends to mail a proxy circular in the
upcoming weeks to shareholders for a meeting expected to be held in
July 2017.
In addition to shareholder and court approvals, the transaction
is subject to customary closing conditions, including receipt of
all regulatory approvals, and is expected to close by September 30, 2017.
The Arrangement Agreement includes a non-solicitation covenant
on the part of Merus, subject to customary "fiduciary out"
provisions that entitle Merus to consider and accept unsolicited
superior proposals and a right in favour of Norgine to match any
superior proposal. If the Arrangement Agreement is terminated in
certain circumstances, including if Merus enters into an agreement
with respect to a superior proposal or if the Board of Directors of
Merus (the "Board") withdraws or modifies its recommendation
with respect to the Arrangement, Norgine will be entitled to a
termination fee of $7.5 million. Full
details of the Arrangement will be included in an information
circular to be mailed to Merus shareholders in accordance with
applicable securities laws.
The Board, after consultation with its financial and legal
advisors unanimously recommends that Merus shareholders vote in
favour of the Arrangement. The Board has also received fairness
opinions from both Rothschild & Co. and Clarus Securities Inc.
in connection with the Arrangement Agreement to the effect that, as
of the date of such opinions, and subject to the assumptions,
limitations and qualifications set forth therein, the consideration
to be received by Merus' common shareholders pursuant to the
Arrangement is fair from a financial point of view.
The transaction is structured as a plan of arrangement under the
Business Corporations Act (British
Columbia). Further details regarding the terms of the
transaction are set out in the Arrangement Agreement which will be
publicly filed by Merus under its profile
at www.sedar.com.
Advisors
Rothschild & Co. is acting as financial advisor and Torys
LLP is acting as legal counsel to Merus. RBC Capital Markets is
acting as financial advisor and Stikeman Elliott LLP is acting as
legal counsel to Norgine.
About Merus
Merus is a specialty pharmaceutical company focused on acquiring
and optimizing legacy and growth products. The Company leverages
its expertise and scalable platform across Europe, Canada and select other markets to deliver
value.
About Norgine
Norgine is a leading European specialist pharmaceutical company
with a direct commercial presence in all major European markets. In
2016, Norgine's total revenue was €368 million, including product
sales, partnering milestones and other income. Norgine employs over
1,000 people across its commercial, development and manufacturing
operations and manages all aspects of product development,
production, marketing, sale and supply. Norgine specialises in
gastroenterology, hepatology, cancer and supportive care. Norgine
is headquartered in the
Netherlands. Norgine owns a R&D site in Hengoed,
Wales and two manufacturing sites
in Hengoed, Wales and Dreux,
France. For more information,
please visit www.norgine.com
In 2012, Norgine established a complementary business Norgine
Ventures, supporting innovative healthcare companies through the
provision of debt-like financing in Europe and the US. For more information,
please visit www.norgineventures.com.
Forward-Looking Statements
Certain statements contained in this press release may
constitute "forward-looking statements" within the meaning of the
United States Private Securities Litigation Reform Act of 1995 and
applicable Canadian securities legislation. Forward-looking
statements include statements relating to the proposed acquisition
of Merus by Norgine, the expected timing, impact and sources of
funding the transaction, the anticipated benefits of the
transaction, effects on footprint, expected synergies, and certain
combined operational, financial and other information and
projections, and other statements that are not historical facts.
Such statements involve assumptions relating to the receipt, in a
timely manner of regulatory, shareholder and Canadian court
approvals in respect of the transaction and may also involve
assumptions relating to the Company's business, including
government regulation of the pricing of the Company's products, the
competitive environment of the Company's products, the stability of
foreign exchange rates and the availability of prospective
acquisition targets.
Although the Company's management believes that the assumptions
underlying these forward-looking statements are reasonable, as of
the date of this news release, they are subject to change after
such date. Such forward-looking statements involve known and
unknown risks, uncertainties and other factors that may cause the
actual results to be materially different from any future results
expressed or implied by these statements. There are also risks that
are inherent in the nature of the transaction, including: risks
regarding the integration of the two entities; incorrect
assessments of the values of the other entity; and failure to
obtain any required regulatory or other approval (or to do so in a
timely manner). There is no assurance that the transaction will
occur, or that it will occur on the terms and conditions
contemplated in this news release. The anticipated timeline for
completion of the transaction may change for a number of reasons,
including the inability to secure necessary regulatory, Canadian
court or other approvals in the time assumed or the need for
additional time to satisfy the conditions to completion of the
transaction. Investors should refer to the Company's MD&A,
Annual Information Form and Annual Report on 40-F for the year
ended September 30, 2016 for a more
comprehensive discussion of the risks that are material to the
Company and its business. In light of these and other
uncertainties, the forward-looking statements included in this
press release should not be regarded as a representation
by Merus that Merus' plans, objectives and guidance
will be achieved. These forward-looking statements speak only as of
the date of this press release, and we undertake no obligation to
update or revise the statements except as required by applicable
securities laws.
SOURCE Merus Labs Inc.