Assertio to acquire Spectrum in all-stocl and CVR transaction

Assertio Holdingsa (ASRT) and Spectrum Pharmaceuticals (SPPI) announced that they have entered into a definitive agreement pursuant to which Assertio will acquire all outstanding shares of Spectrum in an all-stock and contingent value rights, or CVR, transaction. Under the terms of the agreement, at closing, Spectrum stockholders will receive a fixed exchange ratio of 0.1783 shares of Assertio common stock for each share of Spectrum common stock they own, implying an upfront value of $1.14 per Spectrum share, or approximately $248M, based on Assertio’s stock price on April 24 and an initial 65% premium to Spectrum’s closing price on such date. Additionally, Spectrum stockholders will receive one CVR per Spectrum share entitling them to receive up to an additional 20c per share in total, or approximately $43M, payable in cash or stock at Assertio’s election, for $1.34, or approximately $291M, a total potential premium of 94%. Subject to adjustments, each CVR shall represent the right to receive 10c payable upon ROLVEDON net sales achieving $175M during the calendar year ending December 31, 2024, and 10c payable upon ROLVEDON net sales achieving $225M during the calendar year ending December 31, 2025. Following the close of the transaction, Assertio stockholders will own approximately 65% of the combined company, and Spectrum stockholders will own approximately 35%, on a fully diluted basis. The transaction, which has been approved by the boards of directors of both companies, is expected to close in the Q3. Assertio intends to retain the majority of Spectrum’s commercial team and add operating costs of approximately $60M annually. The remaining cost synergies are expected to accelerate and enhance the profit opportunities for the combined company and generate double-digit accretion to adjusted EPS and increased operating cash flow in 2024.