UCB SA is acquiring Ra Pharmaceuticals Inc. for $48 per share in cash, for a total transaction value of about $2.1 billion.
The cash consideration represents a 93% premium to Ra Pharma shareholders based on the 30-day volume-weighted average closing stock price of Ra Pharma before deal signing.
Cambridge, Mass.-based Ra Pharma is developing zilucoplan in a late-stage study for treating generalized myasthenia gravis, a chronic autoimmune disease in which auto-antibodies attack specific proteins in the neuromuscular junction. This blocks the communication between the nerves and the muscles, leading to muscle weakness and fatigue.
Brussels-based UCB also intends to further develop zilucoplan for other indications including amyotrophic lateral sclerosis and immune-mediated necrotizing myopathy.
Ra Pharma is anticipated to launch six products in the next five years, boosting UCB's neurology and immunology portfolios, UCB CEO Jean-Christophe Tellier said.
UCB said the takeover will result in accelerated top and bottom line growth from 2024 onward.
The transaction will have no impact on UCB's 2019 financial guidance. The deal will be dilutive to the biopharmaceutical company's midterm earnings level and hence move the midterm target of UCB reaching a recurring EBITDA ratio to revenue of 31% to 2022 from 2021.
UCB will finance the deal via existing cash resources and new bank term loans, arranged and underwritten by BNP Paribas Fortis and Bank of America Merrill Lynch. UCB said its new net debt to recurring EBITDA ratio would be between 1.5x and 2.0x, with rapid deleveraging expected for the company to maintain significant balance sheet flexibility.
The boards of both companies have approved the deal, which will still require approval from Ra Pharma shareholders and antitrust authorities. The acquisition is expected to close by the end of the first quarter of 2020.
Bank of America Merrill Lynch and Lazard are serving as financial advisers to UCB, while Covington & Burling LLP is the legal adviser.
Centerview Partners is the exclusive financial adviser to Ra Pharma on the deal, with Latham & Watkins LLP acting as legal adviser.
