Viatris to buy Pacira for 1.65 billion dollars, adding post-surgical and knee-pain medicines
Viatris agreed to buy Pacira BioSciences for 36.50 dollars a share in cash, valuing the pain-medicine maker’s equity at 1.65 billion dollars. Pacira sells Exparel for post-surgical pain and Zilretta for osteoarthritis knee pain. Viatris expects to pay mainly from excess cash and short-term borrowing. The deal needs a majority of Pacira shares tendered and a regulatory waiting period to expire, with completion expected by year-end.
Economics & Markets··Midday
Viatris signs a cash deal for Pacira at 36.50 dollars a share
Viatris and Pacira BioSciences signed a definitive agreement under which Viatris will buy all outstanding Pacira shares for 36.50 dollars each in cash, an aggregate equity value of 1.65 billion dollars. The deal adds Pacira’s medicines for post-surgical and arthritis pain to the drugmaker’s portfolio.[1], [2]
Both boards approved the transaction unanimously. A tender offer, which had not yet begun at the announcement date, will be followed by a second-step merger that acquires untendered shares for the same price. Closing requires a majority of outstanding shares to be tendered, expiry of the regulatory waiting period and other customary conditions. The companies expect completion by year-end.[1]
Two pain medicines and 746 million dollars in revenue
Pacira’s two marketed products are Exparel, used for postsurgical pain, and Zilretta, for osteoarthritis-related knee pain. In the twelve months to the end of June Pacira generated about 746 million dollars in revenue and 177 million dollars in adjusted earnings before interest, tax, depreciation and amortisation (EBITDA), a measure that also strips out items such as share-based pay.[1]
Viatris plans to take both products into selected international markets, pair their commercial opportunity with its fast-acting meloxicam programme and use its existing infrastructure. The agreement also adds commercial, market-access, medical-affairs and research capabilities to its US innovative medicines business.[1]
Excess cash and short-term borrowing pay for the deal
Interim chief financial officer Paul Campbell said funding is expected to come primarily from excess cash, with short-term borrowing covering the balance. Management expects a minimal effect on gross leverage and immediate accretion to its financial guidance metrics. Viatris plans to give further transaction details with its third-quarter results. Morgan Stanley and Cravath advise Viatris, while Goldman Sachs and Ashurst Perkins Coie advise Pacira.[1]
