RALEIGH – BioDelivery Sciences International, a pharmaceutical firm focused on pain and neurology products, is being sold to Boston-based Collegium. The news sent shares in BDSI up more than 50% in pre-market trading Monday.
The deal, which has been approved by the boards of both companies, was announced earlier in the day,
Collegium has agreed to pay $5.60 in cash for BDSI shares. BDSI shares closed at $3.64 on Friday.
BDSI has nearly 100 million shares outstanding, according to Yahoo Finance. BDSI said the deal was worth more than $600 million.
“We are pleased to announce the transaction with Collegium, which we view as a testament to the attractiveness of our portfolio and long-term value of our brands,” said Jeff Bailey, CEO of BDSI. “Our team has worked diligently to grow our differentiated products. We believe that this transaction will deliver benefits to patients and prescribers and create significant value for our shareholders.”
Both firms are publicly traded: BDSI (Nasdaq: BDSI) and Collegium Pharmaceutical (Nasdaq: COLL).
BDSI launched in 1997 and has some 175 employees.
“We are excited to announce this acquisition, which represents a major step forward in our mission to build a leading, diversified specialty pharmaceutical company committed to improving the lives of people suffering from serious medical conditions,” said Joe Ciaffoni, CEO of Collegium, in a statement. “The BDSI portfolio expands and enhances Collegium’s differentiated pain offerings and establishes a foothold in neurology, a strategic market adjacency. Importantly, we expect this acquisition will be immediately and highly accretive by expanding our revenue scale and generating significant synergies.”
The offer price of $5.60 represents a 54% premium to BDSI closing share price of $3.64 as of Friday, February 11, 2022, and implies a fully diluted equity value of approximately $604 million using the treasury stock method
The all-cash consideration will be funded by a combination of Collegium existing cash on hand and a $650 million secured financing from funds managed by Pharmakon Advisors, LP (“Pharmakon”), with a four-year term, which will bear an interest rate of Libor+750bps and will be amortized over four years
As part of the transaction, Collegium will repay the existing Collegium term loan from Pharmakon and the existing BDSI term loan from Pharmakon
Post-closing, we expect Collegium net leverage to be below 3.0x based on estimated fiscal year 2021 pro forma combined EBITDA including run rate synergies
Collegium expects to achieve annual run rate synergies of at least $75 million, based off of BDSI estimated 2021 operating expenses, within twelve months post-closing
Collegium expects this transaction to be highly accretive to earnings in 2022 and 2023