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Concordia Healthcare Corp. entered into a definitive agreement to acquire Donnatal from a privately held specialty pharmaceutical company carrying on business as Revive Pharmaceuticals (Revive Pharmaceuticals).

The acquisition of Donnatal represents an advancement in the execution of Concordia s legacy product strategy, providing sustainable revenue going forward.

Donnatal comes in 2 formulations: immediate release Donnatal tablets, and immediate release Donnatal Elixir, a fast acting liquid. Donnatal has delivered gentle, symptomatic relief from the symptoms of IBS, for the past 40 years. In addition to the drug, Concordia is acquiring the sales and marketing infrastructure related to the product.

The company agreed to acquire Donnatal for US $200 million in cash and an aggregate of 4,605,833 common shares of Concordia.

The common shares have an aggregate value of US $65.3 million based on the closing trade price on the Toronto Stock Exchange, and represent approximately 16.19% of the Company s outstanding common shares on a non-diluted basis (approximately 14.99%) after giving effect to the acquisition.

Revive Pharmaceuticals is also entitled to have a representative nominated so that the Company provides and maintains a certain shareholding level in the Company.

The Company entered into a commitment letter with GE Capital, Healthcare Financial Services and its affiliated entities (GE). GE agreed to provide a secured credit facility having a principal amount of up to US $195 million, consisting of a $170 million term loan and a $25 million operating line. The Credit Facility will be secured by the assets of the Company and the assets of its subsidiaries.

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Publication:Mena Report
Date:Mar 24, 2014
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