Mallinckrodt buying Questcor for about $5.6B (Update)

April 7, 2014

Mallinckrodt is buying California-based Questcor Pharmaceuticals Inc. for a combination of stock and cash valued at about $5.6 billion that will help to further diversify the Irish company's business.

Mallinckrodt makes a range of specialty pharmaceuticals. Questcor's primary product is H.P. Acthar Gel, which is used in the management of autoimmune and inflammatory conditions. It is approved in the U.S. for treating 19 indications.

"The increased cash flow and scale of operations of a combined Questcor/Mallinckrodt organization will provide an even stronger platform to support the expansion of Acthar into new therapeutic areas," Questcor President and CEO Don Bailey said in a statement.

Questcor stockholders will receive $30.00 per share in cash and 0.897 Mallinckrodt shares for each Questcor share they own, for a total consideration of approximately $86.10 per Questcor share. The $5.6 billion price of the deal includes Mallinckrodt's cost of buying unexpired stock options as well as the outstanding Questcor shares. Questcor is based in Anaheim, California.

That offer represents a 27 percent increase over Questcor's closing price on Friday. Questcor shares climbed $11.63, or 17.1 percent, to $79.50 in morning trading on Monday.

After the deal closes, Mallinckrodt PLC shareholders will own about 50.5 percent and former Questcor shareholders will own about 49.5 percent of the combined company's stock. Both companies' boards unanimously approved the transaction. It still needs approval of both companies' shareholders.

The combined company will be headed by Mallinckrodt President and CEO Mark Trudeau. Mallinckrodt's board will expand by three members to 12 directors. The three new members will include Bailey and two of Questcor's current, independent directors, Angus Russell and Virgil Thompson. Mallinckrodt Chairman Melvin Booth will remain in that position.

Once the transaction is complete, Questcor's commercial operations will function as a separate unit within Mallinckrodt's specialty pharmaceuticals segment and report directly to Trudeau. Mallinckrodt anticipates adding Questcor executives to its leadership team, with the appointments expected to be announced at a later date.

Mallinckrodt will continue to be domiciled in Ireland. Its principal executive office will remain in Dublin.

The deal is expected to immediately add to Mallinckrodt's fiscal 2014 adjusted earnings per share and significantly add to fiscal 2015 adjusted earnings per share.

The transaction is targeted to close in the third quarter. Mallinckrodt shares fell $2, or 3.2 percent, to $60.51 in morning trading.

Explore further: Mallinckrodt buying Cadence Pharma for $1.21B

Related Stories

Mallinckrodt buying Cadence Pharma for $1.21B

February 11, 2014

Health care products company Mallinckrodt is buying Cadence Pharmaceuticals Inc. for about $1.21 billion to help enhance its specialty pharmaceuticals segment.

Recommended for you

Researchers identify source of opioids' side effects

January 17, 2017

A commercially available drug may help drastically reduce two side effects of opioid painkillers—a growing tolerance and a paradoxical increased sensitivity to pain—without affecting the drugs' ability to reduce pain, ...

CVS generic competitor to EpiPen, sold at a 6th the price

January 12, 2017

CVS is now selling a rival, generic version of Mylan's EpiPen at about a sixth of its price, just months after the maker of the life-saving allergy treatment was eviscerated before Congress because of its soaring cost to ...

Many misuse OTC sleep aids: survey

December 29, 2016

(HealthDay)—People struggling with insomnia often turn to non-prescription sleep remedies that may be habit-forming and are only intended for short-term use, according to a new Consumer Reports survey.

The pill won't kill your sexual desire, researchers say

December 15, 2016

Taking the pill doesn't lower your sexual desire, contrary to popular belief, according to research published in the Journal of Sexual Medicine. The authors of the research, from the University of Kentucky and Indiana University ...

0 comments

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.