OT....Array buyout by Pfizer
'Endpoints' article tells how the deal came about, the time frame and executive compensation.
Seducing Pfizer: How Array’s team patiently worked up the ladder to win an $11.4B bid from Albert Bourla
Array BioPharma CEO Ron Squarer and his top team spent well over 2 years scouting for someone to buy the company. And at the end of that lengthy search process a few days ago, the CEO placed the company in Pfizer’s hands for $11.4 billion and will now walk away from his sales effort with a fortune worth $124.7 million for stock and $85.2 million to cover the golden parachute.
Ron Squarer
But it wasn’t easy.
It started on January 23, 2017, according to a new SEC filing, when the company brought in Centerview Partners to begin the money hunt. They soon reached out to 4 likely buyers, including Pfizer, but never got anything started.
It wasn’t until October 8, 2018 that Squarer got his first serious nibble from one of the big league CEOs, who wasn’t identified by name. Not surprisingly, the board thought it was a good idea to follow up with Party A. They set up a special committee to proceed.
The phone lines were open. But while the interest remained, no numbers were mentioned. A few weeks later, the CEO of Party B stepped, looking for a collaboration. But still nothing definite came through. In early January, 2019, the CEO of Party A was still expressing interest, but never made an offer.
In early February, 2019, it was time to set in motion plan C. If no one wanted to make an offer, maybe a little one-on-one time would help with a potential buyer like, oh, Pfizer?
Andrew Robbins, the COO of Array, reached out to John DeYoung, Pfizer’s BD chief. Perhaps, he said, DeYoung would be interested in learning more about Array?
DeYoung did.
And when they met at the end of February, DeYoung brought in Christopher Boshoff, chief development officer—oncology at Pfizer “to discuss Array’s commercialization of encorafenib and binimetinib, its research platform and other high-level non-confidential matters regarding Array’s programs.”
By mid-March, at a time that Pfizer was still publicly committed to staying the course with the pipeline, they were ready to sign a nondisclosure agreement to get up close and personal. Six weeks later, Array execs were prepping for any other overtures that might come its way after the Phase III BEACON CRC data arrived.
Pfizer execs arrived in Boulder for a tour and a meet-up with Robbins and the CSO, Dr. Nicholas Saccomano.
Perhaps not coincidentally, the compensation committee got into the act to review the execs’ financial packages in the event of a change of control. And they were ready with some added encouragement to whet Pfizer’s appetite.
On May 17, 2019, Mr. Robbins reached out to Mr. DeYoung and Dr. Boshoff by telephone and shared high-level top line results data from the BEACON Trial.
The release came a few days later and shares spiked. Soon after Robbins was back on with Party B about that strategic deal they were interested in. And a few days after that Robbins and Saccomano had a sit down in New York with a big group at Pfizer, including Pfizer R&D chief Mikeal Dolsten and oncology president Andrew Schmeltz.
On May 29, the Pfizer nibbling turned into a bid, finally. Pfizer CEO Albert Bourla, new to the job of buying companies, called Squarer to say he was making an offer, which arrived at $44 a share — a 62% premium, which had been narrowed considerably by the boisterous market response to the BEACON data.
This time everyone at Array swung into action.
$44 a share? Not enough, said Array’s board, which had no other offers on hand and only one other potential deal brewing on the sidelines. There was no indignant rejection, as can happen at this stage, but Array was the solicitor here.
Array said they would be open to considering a sweetener.
Pfizer came back at $48 a share, but there was a catch. Array couldn’t try to shop the deal for a better price in an effort to work up a bidding war. And they wanted it done by June 17.
They started hammering out the particulars, which included the new compensation plan, which was put into place with some revisions.
How about Party B’s interest? They demurred, unlikely to make a better offer.
Array and Pfizer executed the deal on June 14, and announced it June 17.
Here’s what the team gets for their work:
Ron Squarer, CEO: $124.7 million for stock; $85.2 million golden parachute
Jason Haddock, CFO: $33.3 million for stock; $25.9 million golden parachute
Andrew Robbins, COO: $55.6 million for stock; $43.3 million golden parachute
Victor Sandor, CMO: $42.6 million for stock; $36.1 million for golden parachute
Nicholas Saccomano, CSO: $26.2 million for stock; N/A
Cheers!
Flubber
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