Aerie Pharmaceuticals (NASDAQ:AERI) stock is rising higher on Tuesday following news of an acquisition deal with Alcon (NYSE:ALC).
Alcon is agreeing to acquire Aerie Pharmaceuticals for $770 million. That works out to $15.25 per share, which is a 37% premium to AERI stock’s closing price on Monday. It will fuel the transaction with short-term and long-term debt.
Alcon expects several benefits from the deal with Aerie Pharmaceuticals. That includes adding Rocklatan and Rhopressa to its list of commercial products. The company will also gain AR-15512, a dry eye disease treatment currently in its Phase 3 clinical trial.
Alcon also notes that Aerie Pharmaceuticals’ glaucoma franchise is expected to produce revenue of between $130 million and $140 million in 2022. This has the company expecting the acquisition to be “accretive” to its diluted earnings per share (EPS) starting in 2024.
Aerie Pharmaceuticals CEO Raj Kannan said this about the deal:
“Alcon’s global infrastructure, financial resources, and commercial capabilities will accelerate the standard of care by helping more patients have access to Aerie’s innovative products. I am confident that this combination with Alcon is in the best interest of patients and our shareholders.”
Both boards of directors for these companies have already signed off on the deal. Now, they just need approval from regulators and holders of AERI stock. If all goes well, the two companies expect the acquisition to close in the fourth quarter of 2022.
News of the acquisition has AERI stock seeing heavy trading today. As of this writing, more than 15 million shares have changed hands. That’s well above the daily average trading volume of about 645,000 shares.
AERI stock is up 35% as of Tuesday morning.
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On the date of publication, William White did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
