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Mallinckrodt to buy Sucampo Pharmaceuticals for $1.2B

Mallinckrodt Public Ltd. Co. is set to acquire Sucampo Pharmaceuticals Inc. in a transaction valued at approximately $1.2 billion.

Mallinckrodt will acquire all outstanding shares of Sucampo at $18 apiece through a cash tender offer and will also assume the entity's debt.

The acquisition will give Mallinckrodt access to Sucampo's commercialized products and assets that are in the development phase. The products include Sucampo's constipation treatment Amitiza, which had reported global net sales of $456 million in 2016.

Mallinckrodt expects to use its existing revolving credit facility, a new secured term loan, and cash on hand to fund the transaction.

Sucampo stockholders representing 32% of the company are supporting the agreement which is also backed by the boards of both companies.

Mallinckrodt expects a 30 cents accretion towards its adjusted diluted earnings per share in 2018, and at least double that amount in 2019, assuming the merger closes in the first quarter of next year.

The merger is subject to customary closing conditions, including expiration of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act.

Deutsche Bank served as Mallinckrodt's exclusive financial adviser, while Wachtell Lipton Rosen & Katz served as its exclusive legal adviser.

Jefferies LLC served as Sucampo's exclusive financial adviser and Cooley LLP served as its exclusive legal adviser.