Irish drugmaker Mallinckrodt is laying around $1.3 billion on the table to buy San-Diego, California-based biotech Cadence Pharmaceuticals.
The group is digging deep to bag access to Cadence's intravenous pain killer Ofirmev (acetaminophen injection), which is expected to generate sales of around $110 million for 2013 and is gaining in popularity (2012 reported revenues were $50 million).
As per the transaction, Mallinckrodt will pay $14.00 per share in cash, or around $1.3 billion, for Cadence, which represents a 32% premium its 30-trading-day volume average price.
The firms expect the deal to close in mid- to late-March, and Mallinckrodt said the acquisition should be immediately accretive to its fiscal year 2014 adjusted diluted earnings per share, and significantly accretive to its fiscal year 2015 adjusted diluted EPS.
Mark Trudeau, the Irish group's chief executive and president, said the move falls in line with its strategy to become "a leading global specialty pharmaceuticals company", and that it is "well-positioned to further accelerate the trajectory of Ofirmev and realise the full value of this product in the marketplace".
From the other side of the fence, Cadence chief executive and president Ted Schroeder described Mallinckrodt as "a natural fit to provide the resources and expertise that can expand patient access for Ofirmev," and noted that the move will also provide its shareholders "with a strong return on their investment.”