Supernus to acquire Adamas in a deal worth up to $850 million

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• Supernus Pharmaceuticals (NASDAQ:SUPN) has agreed to acquire Adamas Pharmaceuticals (NASDAQ:ADMS) for up to $850M worth of cash and contingent value rights. In reaction to the news, Adamas Pharmaceuticals (ADMS) has climbed ~75.1% in the pre-market.
• Per the terms of the agreement, Supernus (SUPN) will make a tender offer of $8.10 in cash per Adamas (ADMS) share for a total value of approximately $400M.
• The deal also includes two non-tradable contingent value rights (CVR) worth up to $1.00 per share (total value of ~$50M) for a total consideration of $9.10 per share in cash (total value of nearly $450M).
• The CVRs, each worth $0.50 per share, are related to sales of GOCOVRI, an oral medication to treat OFF and dyskinesia in patients with Parkinson’s disease receiving levodopa-based therapy.
• The transaction is expected to close in late Q4 2021 or early Q1 2021. The acquisition is expected to result in synergies of $60 – $80M in year one and become significantly accretive in 2022.
• A conference call and webcast are scheduled for October 11 at 8:30 a.m. ET.
• Supernus (SUPN) reported $855.3M in cash and equivalents as of Q2 2021 compared to $772.9M in 2020 year-end.

Comments

[Dodilligence]

This is a mistake. They are NOT paying $850 million. Max price is $450 million.

[Dodilligence]

Half of the increase in value for SUPN is the stupid analysts realizing that the long-term cash is not included in any EV calculations for this company. In other words, they can buy this business with cash that nobody has given them credit for. Super lame, but at least they are burning it for a decent business.

[freedomrd1776]

So do I get one share for my share of ADMS or do I get bought out??? Bit confused what will happen and if I should exit or hold.

[Biologics]

@freedomrd1776 I can't say sell or hold... but I don't see a strong reason to sell unless you need the cash now. The CVRs could deliver some additional value in the future.

[vpribish]

@freedomrd1776 you will get $8.10 cash if the tender succeeds and 2 CVRs (non-tradable) which will just hang out in your broker account until they pay out or expire in 2024 and 2025.

[freedomrd1776]

@vpribish Thanks... I sold it. Time to invest in a different stock.

[Biologics]

This was a rumor years ago and it made perfect sense. Good deal for both. Congrats ADMS longs. I will look for entry in SUPN in the near-future.

[freedomrd1776]

@Biologics Was wondering if you could answer my question I posted before market opens?

[Biologics]

@freedomrd1776 I haven't read an official 8-K, so I can't say for certain. However, it looks as if your share will be bought out and you will also receive 2 CVRs that are essentially sweeteners if GOCOVRI performs well in the future.

[freedomrd1776]

@Biologics Thanks for the reply.