Salix Pharmaceuticals Ltd. (NASDAQ:SLXP) To Buy Santarus Inc. (NASDAQ:SNTS)
Santarus, Inc. (NASDAQ:SNTS) has entered into a definitive agreement under which Salix Pharmaceuticals, Ltd. (NASDAQ:SLXP) will acquire Santarus for about $2.6 billion. Salix is offering $32.00 per share, which represents about 36% premium over Santarus’ $23.53 per share closing price on November 6, 2013.
Santarus is a specialty biopharmaceutical company focused on providing gastroenterology products. Through this acquisition, Salix aim to strengthen its lead position in gastrointestinal market. According to the company, the acquisition will help make the combined entity as the largest U.S. gastroenterology-focused pharmaceutical company with annual sales of $1.3 billion. Salix said it will have a leading position with a more diverse array of about 22 products.
Salix CEO Carolyn Logan said that both are specialty focused companies, and so there’s no overlap in the target markets.
Approved by both Santarus and Salix board of directors, the transaction is expected to close in the first quarter of 2014.
Salix intends to fund the acquisition with a combination of $800 million cash on hand and $1.95 billion in committed funding from Jefferies Finance LLC. Jefferies will also provide an additional $150 million in revolving credit facility.
“We are extremely pleased with the Santarus acquisition, which is transformative for Salix both commercially and financially, fulfilling many of our strategic needs, while providing immediate and significant accretion in 2014 and beyond,” said Logan in a statement.
Jefferies LLC is Salix’s financial advisor for the deal, while Santarus was advised by Stifel, Nicolaus & Co.
Santarus, Inc. (NASDAQ: SNTS) also reported its financial earnings for the third quarter of 2013. The company’s revenues jumped 81% year over year to reach $98.8 million. Net income was $30.3 million or $0.38 EPS, compared with $9.0 million or $0.13 EPS for the same period last year. As on September 30, the company had cash, cash equivalents and short-term investments of $168.7 million.