Elanco Animal Health Inc. plans to start concurrent offerings of 19,159,866 common shares and 11 million tangible equity units in order to finance part of its $7.6 billion acquisition of Bayer AG's animal health business.
The equity units offering will have an aggregate stated amount of $550 million, the Greenfield, Ind.-based pharmaceutical company noted in a Jan. 21 press release.
Each equity unit has a stated amount of $50 and will consist of a prepaid stock purchase contract and a senior amortizing note due Feb. 1, 2023. The company has applied to list the tangible equity units on the New York Stock Exchange under the symbol ELAT.
Elanco, which develops, manufactures and markets products for companion and food animals, plans to grant underwriters an option to buy up to an additional 1,915,987 common shares.
The company said it will also use the proceeds from the offerings to pay fees and expenses related to the deal with Bayer. If the acquisition falls through, the company will use the proceeds for general corporate purposes.
Elanco is selling its Osurnia, an ear inflammation therapy for dogs, to U.K. drugmaker Dechra Pharmaceuticals PLC for $135 million in cash to allay antitrust concerns related to the Bayer deal. Elanco previously said it expects to close the deal in mid-2020.
Goldman Sachs & Co. LLC, Citigroup and J.P. Morgan are joint book-running managers for the offerings.