Biogen Inc. (NASDAQ: BIIB) has agreed to acquire Reata Pharmaceuticals (NASDAQ: RETA) for $172.50 per share in cash, valuing the rare disease drug maker at about $7.3 billion. The deal is expected to close in Q4 and is subject to certain conditions. Biogen will finance the acquisition with cash on hand and term debt issuance. The acquisition is expected to be slightly dilutive to Biogen’s non-GAAP EPS in 2023, neutral in 2024, and significantly accretive starting in 2025.
Biogen Inc. (NASDAQ:BIIB) agreed to buy Reata Pharmaceuticals (NASDAQ:RETA) for $172.50 per share in cash, or an enterprise value of about $7.3 billion, for the rare disease drug maker. Reata shares jumped 52%. Biogen ticked down 0.9%.
The acquisition is expected to close in Q4, according to a statement on Friday. Biogen (BIIB) is paying a premium of 58% to Reata’s (RETA) closing price on Friday.
The acquisition is expected to be slightly dilutive to Biogen’s non-GAAP EPS in 2023, roughly neutral in 2024, and significantly accretive beginning in 2025.
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Biogen (BIIB) expects to finance the acquisition with cash on hand, supplemented by the issuance of term debt. Biogen has entered into voting and support agreements with certain stockholders of Reata representing approximately 36% of the voting power of Reata’s common stock.
The news comes after Betaville reported on Thursday that Reata Pharma (RETA) was speculated to have attracted takeover interest, likely from two large industry players. Bloomberg earlier Friday reported the news of Biogen’s interest.
The acquistion of Reata (RETA) comes after its shares surged almost 200% on March 1 after the FDA approved the company’s Friedreich’s ataxia drug Skyclarys. Skyclarys is the first drug approved for the rare movement disorder.
Lazard acted as financial advisor to Biogen (BIIB) in the deal and Cravath, Swaine & Moore acted as its legal advisor. Goldman Sachs acted as financial advisor to Reata and Vinson & Elkins acted as its legal advisor.
Source: SeekingAlpha
