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Emergent BioSolutions to Acquire Cangene Corporation

Thu, 12/12/2013 - 8:23am

Emergent BioSolutions has entered into a definitive agreement with Cangene Corporation under which Emergent will acquire all of the outstanding common shares of Cangene in an all-cash transaction valued at $3.24 per share on a fully diluted basis for an aggregate purchase price of $222 million. The transaction is consistent with Emergent’s growth plan in that it diversifies the company’s revenue mix, adds commercial product sales and contributes to earnings growth. The transaction is expected to be accretive in 2014, exclusive of transaction-related costs.

The Boards of Directors of both companies have approved the transaction. Agreements are in place with shareholders who collectively control, directly or indirectly, approximately 61% of the outstanding common shares of Cangene, under which they have agreed to irrevocably support and vote in favor of the transaction. The companies expect to complete the transaction in the first calendar quarter of 2014.

“The acquisition of Cangene is consistent with our stated growth plan to acquire revenue generating products that leverage our core capabilities,” said Daniel J. Abdun-Nabi, president and chief executive officer of Emergent BioSolutions. “The addition of Cangene is expected to accelerate our growth driven by a substantially expanded biodefense franchise, a portfolio of approved specialty therapeutics sold through an established commercial infrastructure, and fill/finish manufacturing capabilities with growing contract revenues. The combined company presents a clearly attractive financial profile with pro forma total revenues of over $430 million and pre-tax operating income of approximately $55 million. This acquisition represents an important step in advancing Emergent’s leadership in specialty pharmaceuticals and positions us to drive significant growth in shareholder value.”

Cangene Corporation is a biopharmaceutical company focused on the development and commercialization of specialty therapeutics, primarily targeting biodefense applications as well as infectious disease, hematology and transplantation. Cangene has three specialty products that are included in the U.S. Strategic National Stockpile: BAT ® (Botulism Antitoxin (Equine) Heptavalent), VIGIV ® (Vaccinia Immune Globulin Intravenous (Human)), and AIGIV (Anthrax Immune Globulin Intravenous). Cangene also has four approved commercial specialty products: WinRho ® SDF (Rho(D) Immune Globulin Intravenous (Human)), HepaGam B ® (Hepatitis B Immune Globulin (Human) Injection), VARIZIG ® (Varicella Zoster Immune Globulin (Human)), and episil ®. Cangene maintains manufacturing and plasma collection facilities in Winnipeg, Manitoba, contract manufacturing facilities in Baltimore, Maryland, and a sales and marketing office in Philadelphia, Pennsylvania.

“This transaction represents an exciting and very promising opportunity for Cangene and delivers significant value to our shareholders,” stated John Sedor, president and chief executive officer of Cangene Corporation. “Cangene has a history of success in medical countermeasures while building a growing, profitable product portfolio supported by a strong, focused commercial platform and an established contract manufacturing operation. Our diversified business across biodefense, specialty pharmaceuticals and contract manufacturing is strategically consistent with Emergent’s infrastructure and vision for the future. We are confident the Emergent team believes in what we do, in our products, in our people and in our potential. We look forward to building a highly successful future together.”

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