DEERFIELD, Ill. & DUBLIN, Ireland—Horizon Pharma, Inc. and Vidara Therapeutics International Ltd. have announced the establishment of a definitive agreement by which Horizon Pharma will acquire Vidara through a reverse merger, with the combined company to be named Horizon Pharma plc. The deal will be funded through a combination of stock and cash, with an approximate transaction total of $660 million. In accordance with the agreement, Vidara will combine with Horizon Pharma, Inc. with roughly 74 percent of Horizon Pharma plc’s ordinary shares to be exchanged for Horizon Pharma Inc.’s common shares, with Horizon surviving the merger. Vidara’s shareholders will retain approximately 26 percent of the combined company and receive $200 million in cash, subject to certain adjustments. Both companies’ boards of directors have unanimously approved the transaction. 
Horizon Pharma, Inc. shareholders stand to receive one ordinary share of stock in the combined company in exchange for each share of Horizon Pharma, Inc. common stock they own at closing. Horizon Pharma plc is expected to have a capitalization of roughly 100 million basic and 122 million fully diluted shares.
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Read MoreIf the transaction closes, the combined company will be led by Timothy P. Walbert, chairman, president and CEO of Horizon Pharma, who will be chairman, president and CEO of the combined company. Existing Horizon Pharma, Inc. officers would be officers of the combined company as well, with Vidara executives also holding leadership and management roles in Horizon Pharma plc.
“The addition of ACTIMMUNE complements our commercial business model focused on targeted promotion to primary care physicians and specialists,” Walbert said in a press release regarding the deal. “The combined company would have a portfolio of four proprietary products and an international platform that builds on our strategy of organic growth and acquisitions. We look forward to working with the Vidara team to bring our companies together to accelerate the creation of shareholder value.”
Zacks Investment Research notes on its website that it is “positive on this agreement,” adding that the combined company is expected to see “pro-forma 2014 revenues in the range of $250 million to $265 million.” The acquisition is expected to be accretive to Horizon Pharma’s pro-forma earnings in 2014 as well, as Horizon expects to see EBITDA of $65 million to $75 million. In addition, Zacks calls Actimmune, which it says saw revenues of $58.9 million last year, “a perfect fit for Horizon Pharma’s portfolio which includes Duexis, Vimovo and Rayos.” Zacks adds that “Horizon Pharma also plans to evaluate Actimmune for additional indications.”
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Read MoreVidara’s Actimmune is a bioengineered form of interferon gamma-1b, a protein that acts as a biologic response modifier. In the United States, the drug is approved by the U.S. Food and Drug Administration to treat chronic granulomatous disease and severe, malignant osteopetrosis in children and adults, in addition to reducing the frequency and severity of serious infections associated with chronic granulomatous disease and delaying the time to disease progression in severe, malignant osteopetrosis patients.
Horizon Pharma brought on Citigroup Global Markets Inc. as its lead financial advisor for the transaction, with JMP Securities LLC acting as co-financial advisor. Horizon enlisted Cooley LLP and McCann FitzGerald (Dublin) as its legal advisors and KPMG LLP as its tax advisor. For its part, Vidara brought on Lazard Middle Market as its financial advisor, with Mayer Brown LLP, Burke Warren McKay and Serritella PC and A&L Goodbody (Dublin) serving as its legal advisors.
