Key points:
- The Antares Pharma stock rallied 48.66% after accepting an acquisition offer.
- Investors cheered Halozyme’s acquisition of Antares Pharma for $960 million.
- The combined company will be a significant player in the automated high volume drug-delivery niche.
The Antares Pharma Inc (NASDAQ: ATRS) stock price rallied 48.66% after accepting an acquisition offer from Haloyme (HALO), valuing its shares at $5.60 each, equating to a market valuation of $960 million.
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The two companies’ boards approved the deal to see Antares Pharma’s business integrated into Halozyme’s. The acquisition is expected to be immediately accretive to Halozyme’s 2022 revenues and non-GAAP earnings.
Halozyme intends to boost its high volume drug delivery system by acquiring Antares Pharma, which boasts of a best-in-class drug injector system that can be paired with Halozyme’s drug delivery system for the best results.
The company already licenses its technology to major pharmaceutical companies, including AbbVie and Pfizer, with the Antares Pharma systems also having significant licensing potential.
The acquisition will be funded via a cash offer with Halozyme using its existing cash reserves to fund the deal.
Investors cheered the takeover, as evidenced by Antares Pharma’s share price rally. Halozyme expects to maintain a net-debt-to-EBITDA ratio of 3.5x after the transaction closes, with the ratio declining significantly in the quarters after the transaction’s financial close.
It is impressive to see a company fund a significant acquisition using its existing cash reserves to keep its net debt low instead of taking on massive debts to fund acquisitions that might not be accretive to revenues or earnings.
The deal’s closing is subject to several conditions, including the tendering of the majority of Antares Pharma’s outstanding shares of common stock, the expiration of the HSR waiting period, and other customary closing conditions.
Once the tender offer is complete, Halozyme will acquire the remaining shares not tendered in a second-step merger at the same price. The entire transaction is expected to close in H1 2022.
*This is not investment advice. Always do your due diligence before making investment decisions.
ATRS stock price.
The Antares Pharma stock price surged 48.66% premarket to trade at $5.56, rising from Tuesday’s closing price of $3.74.