Malvern-based Endo, a diversified pharmaceutical company, and Ireland-based Mallinckrodt plc, a specialty pharmaceutical products and therapies developer, manufacturer, marketer, and distributor, recently announced that they agreed to combine their generic pharmaceuticals businesses.
The companies will finance the transaction with cash and $900 million Goldman Sachs & Co. provided to Endo.
Endo’s sterile injectables business also is included in the deal. The business will become a separate company at some point in the future, subject to board of directors’ approval and other conditions.
Once the deal completes, Mallinckrodt shareholders will own 50.1 percent of the combined company on a pro forma basis, and Mallinckrodt will be the holding company for the combined business.
Endo will become a wholly-owned subsidiary of Mallinckrodt. Endo shareholders will receive $80 million in cash and will own 49.9 percent of the combined company on a pro forma basis.
Both companies’ boards of directors approved the deal, which is expected to close during the second half of the year, subject to shareholder and regulatory approvals and customary closing conditions.
The combined company will be listed on the New York Stock Exchange, and Mallinckrodt’s Dublin headquarters will serve as the global headquarters. Siggi Olafsson, Mallinckrodt president and CEO, will become president, CEO and a member of the board of directors. Paul Efron, an Endo board of directors member, will serve as board chairman. The combined company’s board of directors will have nine directors, including three from Mallinckrodt and three from Endo.
The remaining leadership team and directors as well as the location of the combined company’s U.S. headquarters have yet to be announced.
“We believe this combination with Mallinckrodt, along with the subsequent separation of the combined sterile injectables and generics business, presents a unique opportunity to deliver significant shareholder value,” Scott Hirsch, Endo interim CEO, said. “The combined company will possess a branded business with the scale, cash flow and balance sheet strength to invest in both internal and external growth opportunities, including pursuing commercial-stage assets. Additionally, the stable and robust free cash flow generated by the combined sterile injectables and generics business should enable consistent capital returns to shareholders following its separation.”
The combined company will have a portfolio comprised of a range of therapeutic areas and will have 17 manufacturing facilities, 30 distribution centers and approximately 5,700 employees. It will be based primarily in the United States and supported by facilities in Europe, India, Australia and Japan.
The combined company’s sterile injectables and generics business benefit from both companies’ commercial and manufacturing infrastructure, and supply chain capabilities.
The companies hosted a joint conference call on Thursday to discuss the proposed transaction and their fourth quarter and full-year 2024 financial results.