February 13, 2024 | Health Care | North America | Active

Catalent / Novo Holdings: Deal Insight

On 5-Feb-24, Catalent, a manufacturing subcontractor for Novo Nordisk’s (NOVOB DC) popular obesity drug Wegovy, has agreed to be acquired by Novo Holdings, the parent company of Novo Nordisk, for $63.50 per share. The offer represents a 16.5% one-day premium and a 39.1% premium over Catalent’s closing price on 28-Aug-23, the day before the target’s board initiated a strategic review of its business. Shortly after the acquisition completes, Novo Holdings intends to sell three of Catalent’s more than 50 fill-finish sites, located in Anagni, Italy, Bloomington, Indiana, and Brussels, Belgium, to Novo Nordisk, for $11bn. Novo Holdings controls Novo Nordisk through voting and share capital stakes of 77.7% in and 28.1%, respectively. The transaction has been unanimously approved and recommended by Catalent’s board and has garnered support from Elliott Management, a key Catalent investor (2.2%), which has entered into an agreement to support and to vote in favour of the deal. The merger agreement includes a no-shop clause along with customary fiduciary-out provisions. Additionally, it contains standard clauses covering representations, warranties and covenants, as well as a MAC with specific carve outs for war and pandemics. Conditions include Catalent shareholder approval (50%) and regulatory clearances. Notification under HSR and the initiation of the regulatory processes, including to the CMA, will be made within 20 business days (by 6-Mar-24). Critically, HSR clearance is also needed for Catalent’s sale of three fill-finish sites to Novo Nordisk. The companies plan to submit a briefing paper to the UK CMA, and if requested, they will submit a draft merger notice to the regulator within 30 business days of a request. A burdensome clause imposes restrictions on the companies, prohibiting them from taking any ...

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