AstraZeneca to acquire Gracell in $1.2B transaction

AstraZeneca (AZN) has entered into a definitive agreement to acquire Gracell (GRCL). Gracell will operate as a wholly owned subsidiary of AstraZeneca, with operations in China and the US. Under the terms of the definitive agreement, AstraZeneca will acquire all of Gracell’s fully diluted share capital through a merger for a price of $2.00 per ordinary share in cash at closing plus a non-tradable contingent value right, or CVR, of 30c per ordinary share in cash payable upon achievement of a specified regulatory milestone. The upfront cash portion of the consideration represents a transaction value of approximately $1B, a 62% premium to Gracell’s closing market price on December 22, and a 154% premium to the 60-day volume-weighted average price of $3.94 before this announcement. Combined, the upfront and potential contingent value payments represent, if achieved, a transaction value of approximately $1.2B, an 86% premium to Gracell’s closing market price on December 22 and a 192% premium to the 60-day VWAP. As part of the transaction, AstraZeneca will acquire the cash, cash equivalents and short-term investments on Gracell’s balance sheet, which totaled $234.1M as of September 30. The transaction is expected to close in the first quarter of 2024, subject to customary closing conditions, including regulatory clearances, and Gracell shareholder approval. The transaction does not impact AstraZeneca’s financial guidance for 2023.