Cangene Corporation has announced the signing of a definitive agreement under which Emergent BioSolutions ("Emergent") of Rockville, Maryland will acquire Cangene in an all-cash transaction valued at US$222 million (approximately C$236 million).
Under the terms of the agreement, which has been approved by the Boards of Directors of both companies, Cangene shareholders will receive US$3.24 per share (C$3.44 per share) in cash. The purchase price represents a premium of approximately 27% to Cangene's closing stock price of C$2.70 on December 10, 2013 and 45% to Cangene's 90-day volume weighted average stock price.
The acquisition will be implemented through a court-approved Plan of Arrangement under Canadian law and is subject to the approval of Cangene common shareholders, court approval and U.S. regulatory approvals and other customary closing conditions. The transaction is expected to be completed in the first calendar quarter of 2014.
John Sedor, President and CEO of Cangene, said: "This compelling transaction is a reflection of our employees' hard work and the quality and success of our business. Over the last few years, our team has transformed Cangene into an exceptional specialty biopharmaceutical company and biodefense leader, as demonstrated by our recent product approvals and biodefense contracts. We believe Cangene will now benefit from becoming part of Emergent, a leader in developing vaccines, as well as therapeutics for addressing critical diseases and disorders. The combination provides an excellent opportunity for our organization to continue its success, and it delivers immediate, significant value to Cangene shareholders."
Daniel Abdun-Nabi, President and CEO of Emergent, said: "Cangene is a terrific addition to Emergent. Our businesses are highly complementary. The addition of revenue-generating products and services across biodefense, commercial specialty biopharmaceuticals, and contract manufacturing significantly advances Emergent towards achievement of our growth plan. Once the transaction is closed, we look forward to working with the talented Cangene employees to realize the exciting potential of this combination."
Plan of Arrangement
The acquisition will be implemented through a Plan of Arrangement under Canadian law and is subject to a number of customary conditions including, but not limited to, the approval of at least 66 and 2/3% of the votes cast in person or by proxy by Cangene common shareholders at a special meeting of Cangene's common shareholders, as well as court and regulatory approvals.
The terms and conditions of the arrangement and additional details of the transaction will be summarized in Cangene's management information circular, which is expected to be filed and mailed to Cangene's shareholders in early January. A copy of the arrangement agreement will be filed on Cangene's SEDAR profile and will be available for viewing at www.sedar.com. The special meeting of Cangene security holders is scheduled to be held on February 12, 2014, subject to Court confirmation, with closing expected to occur in the first calendar quarter of 2014.
The arrangement agreement is subject to customary non-solicit provisions and Cangene's right to withdraw its recommendation of the transaction to shareholders in the event of a superior proposal. The agreement also contains certain termination rights, including termination fees that would apply in certain circumstances if the transaction is not consummated.
After receiving financial and legal advice, the members of the Board of Directors of Cangene voting on the resolution determined that the arrangement is in the best interests of Cangene, and resolved to support the arrangement and to recommend that its shareholders vote in favor of the arrangement. Raymond James Ltd. has provided an opinion to Cangene's Board of Directors that subject to the assumptions, limitations and qualifications set forth therein, the consideration to be received by holders of common shares pursuant to the arrangement is fair, from a financial point of view, to such holders. A copy of the Raymond James Ltd. opinion and other factors considered by the Cangene Board of Directors and other relevant background information will be included in the management information circular that will be mailed to Cangene common shareholders.
Shareholders collectively controlling approximately 61% of the outstanding common shares of Cangene have entered into support agreements to vote their shares in favor of the transaction with Emergent.