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Friday, March 27, 2020 4:48:40 PM
Combined Company Pro Forma 2019 Net Product Sales of Approximately $128 Million
Expects to Capture Significant Operating and Product Portfolio Synergies Upwards of $40 Million, Accelerating Revenue Growth and Creating Shareholder Value
Arthur Higgins to Become the Non-Executive Chairman and Todd Smith to be Named President and CEO of Combined Company
LAKE FOREST, Ill. and WAYNE, Penn., March 16, 2020 (GLOBE NEWSWIRE) -- Assertio Therapeutics, Inc. (“Assertio” or “the Company”) (ASRT) and Zyla Life Sciences (“Zyla”) (ZCOR), today announced that they have entered into a definitive merger agreement (the “Agreement”). Under the terms of the Agreement, upon the effective time of the merger (the “Merger”), Zyla stockholders will be entitled to receive 2.5 shares of common stock of a newly-formed holding company for each share of Zyla common stock held and the newly combined company will retain the Assertio name and trade on Nasdaq under the ASRT ticker.
The boards of directors of both companies have approved the Merger and the Agreement. The Merger is currently expected to close in the second quarter of 2020, subject to approval by Assertio stockholders and by Zyla stockholders and the satisfaction of other customary closing conditions.
The Merger will create a leading commercial pharmaceutical company with neurology, inflammation and pain products. The combined company will have a leading portfolio of branded non-steroidal anti-inflammatory drugs (NSAIDs) commonly used by neurologists, orthopedic surgeons, internists, women’s health providers, podiatrists and pain care specialists. Together, management intends to build a best-in-class specialty pharmaceutical company focused on commercial execution. The new company will have the platform, profitability and financial strength to both grow its existing portfolio and acquire additional complementary assets.
“Today’s announcement represents an exciting new chapter in the transformation of Assertio and the Merger presents the perfect opportunity for me to transition into the role of non-executive chairman,” said Arthur Higgins, president and chief executive officer (CEO) of Assertio. “With over 25 years of pharmaceutical, medical device and biotechnology experience and a proven track record of success, Todd Smith has the leadership and business skills necessary to take the new Assertio to the next level.”
Following the closing of the Merger, the parties agreed that in addition to Mr. Higgins becoming non-executive chairman of the board of the new holding company, Mr. Smith, the current president, CEO and director of Zyla, will become president, CEO and director of the new holding company.
There will be nine directors on the board of directors of the new holding company, six coming from Assertio including Mr. Higgins and three from Zyla, including Mr. Smith and Timothy P. Walbert, chairman, president and CEO of Horizon Therapeutics and chairman of Zyla’s board of directors, who will become the lead independent director of the board of the new holding company.
“We believe the merger of Zyla and Assertio will create a stronger company with a robust differentiated portfolio,” said Mr. Smith. “The new holdings company’s revenues, EBITDA margin and expected combined company net debt to EBITDA leverage of two times will be notable among the specialty pharmaceutical companies of our size. We believe this transaction positions the combined company to grow its existing businesses and further accelerate growth by adding differentiated products through acquisitions and partnerships.”
Anticipated Strategic and Financial Benefits of New Holding Company
Pro forma 2019 net product sales of approximately $128 million1
Projected pro forma 2020:
Non-GAAP adjusted EBITDA margin of greater than 25 percent
Upwards of $40 million in cost synergies, in addition to Assertio’s previously announced $15 million in acceleration of cost savings initiatives
Complementary products expected to result in leading portfolio of NSAIDs
Positioned to take advantage of trend toward non-opioid pain products
Reduced Zyla debt and holding company is expected to have net debt to EBITDA leverage of two times
Positions Company to add differentiated products through acquisitions and partnerships
Financials
In connection with the Merger, Zyla will repay its promissory note in full and the outstanding balance under its $20 million credit facility. The holding company will assume only the $95 million principal amount of Zyla’s outstanding senior debt under amended terms that provide the combined company flexibility for future business development.
Stifel is acting as the exclusive financial advisor to Assertio and Gibson, Dunn & Crutcher LLP is acting as its legal counsel. MTS is acting as the exclusive financial advisor to Zyla and Dechert LLP is acting as its legal counsel.
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- Form 10-Q - Quarterly report [Sections 13 or 15(d)] • Edgar (US Regulatory) • 05/06/2024 08:56:22 PM
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