Horizon Pharma plc (NASDAQ: HZNP) (“Horizon Pharma”), a biopharmaceutical company focused on improving patients’ lives by identifying, developing, acquiring and commercializing differentiated and accessible medicines that address unmet medical needs, commenced an exchange offer for all of the outstanding shares of common stock of Depomed, Inc. (“Depomed”).
Under the terms of the offer, tendering Depomed shareholders would be able to exchange each share of Depomed common stock for 0.95 Horizon Pharma ordinary shares. The offer is scheduled to expire at 5 p.m., Eastern Time, on November 6, 2015, but may be extended by Horizon Pharma. If the exchange offer is completed, Horizon Pharma would expect to complete a second-step merger as soon as practicable thereafter in order to acquire the remaining Depomed shares.
In addition to the exchange offer, Horizon Pharma also filed today a definitive solicitation statement with the SEC that will be delivered to Depomed shareholders. The solicitation statement seeks the support of Depomed shareholders to call two related special meetings to consider and vote on proposals to remove and replace the current Depomed board of directors and to amend the Depomed bylaws to facilitate shareholder action.
Additional Exchange Offer Details
60 percent premium to Depomed’s unaffected closing share price of $20.64 on July 6, 2015, the final trading day prior to Horizon Pharma’s first public proposal to acquire Depomed.1
54 percent premium to Depomed’s 30-day VWAP of $21.41 on July 6, 2015.1
Depomed shareholders would have a pro forma ownership of approximately 32 percent of the combined company based on Horizon Pharma’s estimates and assumptions.
The exchange offer is being made on the terms and subject to the conditions set forth in the offer to exchange, dated September 8, 2015, included in the preliminary prospectus/offer to exchange filed with the Securities and Exchange Commission today. The conditions include the redemption or removal of certain poison pill rights that the Depomed board has the unilateral ability to remove, the tender of a majority of the total number of outstanding Depomed shares on a fully diluted basis and expiration or termination of the waiting periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and other applicable antitrust laws and regulations. The exchange offer is also conditioned on the vote by Horizon Pharma shareholders to approve the issuance of Horizon Pharma ordinary shares in the acquisition, and Horizon Pharma plans to file a preliminary proxy statement with respect to a special meeting of Horizon Pharma shareholders promptly.
Potential Benefits to Horizon Pharma and Depomed Shareholders of Combined Company
Sizeable revenue, cost and tax synergies resulting in significant and immediate adjusted earnings-per-share accretion for both Horizon Pharma and Depomed shareholders.
Enhanced scale and financial flexibility, including:
- pro forma 2015 estimated net sales of approximately $1 billion and adjusted EBITDA of approximately $375 million;2 and
- enhanced access to the capital markets and considerably lower borrowing costs.
- A more diverse portfolio of medicines with longer patent lives and pipeline growth opportunities.
- A substantial reduction in key risks related to Depomed’s business on a stand-alone basis.
“The exchange offer further demonstrates our resolute commitment to a transaction with Depomed,” said Timothy P. Walbert, chairman, president and chief executive officer, Horizon Pharma plc. “The exchange offer provides a direct mechanism for shareholders to support the consummation of what we believe to be a highly compelling combination that would deliver both short and long-term benefits to our respective shareholders. We again call on Depomed’s board and management to act in the best interests of Depomed shareholders and to meaningfully engage with us towards a consensual transaction.”
The offering documents, including a preliminary prospectus/offer to exchange and a related letter of transmittal, describing the exchange offer and the process for Depomed shareholders to tender their shares of Depomed common stock into the exchange offer, will be delivered to Depomed shareholders. Investors and security holders may obtain free copies of the preliminary prospectus/offer to exchange, Schedule TO and other documents (if and when available) filed with the SEC by Horizon Pharma through the web site maintained by the SEC at http://www.sec.gov. Shareholder questions regarding the exchange offer or requests for offering documents should be directed to Horizon Pharma’s Information Agent for the exchange offer, MacKenzie Partners, Inc., 105 Madison Avenue, New York, NY 10016; shareholders, banks and brokerage firms please call toll-free at 1-800-322-2885.