After years of squabbling and scandal, drug maker Biovail agreed Monday to a revese takeover offer from rival Valeant.
Biovail, founded by entrepreneur Eugene Melnyk and often at loggerheads with the Ottawa Senators owner in recent years, struck a stock swap that will see California-based Valeant executives run the combined company.
Shareholder in Biovail, Canada’s largest public pharmaceutical company, will end up with 50.5 per cent of the stock, while Valeant shareholders will hold 49.5 per cent.
This merger features two cash dividends – sweetners for the company’s owners - with Valeant shareholders promised a $16.77 per share payment, then another $1 per share to share to owners of the combined company once the deal closes.
The two companies project $175-million in annual cost savings from their union, with the combined company turning in revenues of $1.75-billion and pro forma cash flow of $575-million.
Valeant’s financial advisers are Goldman, Sachs & Co. and Jefferies & Co., along with law firms Skadden, Arps, Slate, Meagher & Flom and Ogilvy Renault. Morgan Stanley & Co. is Biovail’s adviser, along with lawyers at Cravath, Swaine & Moore and Blake, Cassels & Graydon.
Goldman Sachs, Jefferies & Co. and Morgan Stanley are setting up a $2.8-billion term loan to finance the transaction
