Catalent Inc (NYSE:CTLT) is planning to acquire Cook Pharmica for $950 million.
The deal will have Catalent Inc paying $750 million for Cook Pharmica when the deal closes. After this, the company will make four additional payments to cover the rest of the cost. These payments will be made on the anniversary of the deal’s closing and won’t be subject to interest.
Catalent Inc says that it will be using cash to acquire Cook Pharmica. The drug development company says that it will fund the deal with new unsecured notes and equity. CTLT has secured financing for the deal from Morgan Stanley Senior Funding, Inc., J.P. Morgan, RBC Capital Markets, and BofA Merrill Lynch.
Catalent Inc is expecting the deal with Cook Pharmica to close during the fourth quarter of 2017. However, it will first need to complete customary closing conditions and get approval from regulators. It also notes that the deal will be accretive to its adjusted net income in the first full fiscal year following the deal.
Following completion of the deal, Cook Pharmica’s over 750 employees will join Catalent Inc’s workforce of more than 10,000 people. This will include members of Cook Pharmica’s executive team.
Morgan Stanley Senior Funding, Inc. is the lead arranger for the deal and Morgan Securities LLC is offering advice to Catalent Inc. CTLT is getting its legal advice for the acquisition from Fried, Frank, Harris, Shriver & Jacobson LLP.
CTLT stock was down 2% as of Tuesday morning, but is up 45% year-to-date.
As of this writing, William White did not hold a position in any of the aforementioned securities.